For other versions of this document, see http://wikileaks.org/wiki/CRS-RL32079
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                                                   Order Code RL32079




                  CRS Report for Congress
                                      Received through the CRS Web




  Federal Contracting of Commercial Activities:
                 Competitive Sourcing Targets




                                       Updated January 12, 2005




                                                L. Elaine Halchin
                        Analyst in American National Government
                                Government and Finance Division




Congressional Research Service ~ The Library of Congress
        Federal Contracting of Commercial Activities:
               Competitive Sourcing Targets

Summary
     The Bush Administration initiated a distinctive program of competitive sourcing
in 2001. The thrust of this reform is to subject commercial activities to public-
private competition, using the policy and instructions contained in Office of
Management and Budget (OMB) Circular A-76. (Commercial activities are defined
as federal activities that could be performed by the private sector.) As required by
the Federal Activities Inventory Reform (FAIR) Act (P.L. 105-270), agencies
compile lists of their commercial activities (and associated full-time equivalents
(FTEs)) and submit them to OMB by June 30 of each year.

     An important component of the Administration's initiative has been the
introduction of goals or targets. In 2001, OMB announced a long-term goal for
competitive sourcing: submit 50% of the FTEs listed on FAIR inventories to
competition. No deadline accompanied this goal. OMB also established interim
goals for agencies: compete 5% in FY2002 and an additional 10% in FY2003. OMB
also developed an executive branch management scorecard to rate agency progress
on the President's Management's Agenda (PMA), of which competitive sourcing is
one component.

      In 2002, some critics of the competitive sourcing targets suggested that they
were arbitrary. Congressional interest in the competitive sourcing targets, and how
they were developed, was reflected in two legislative measures in 2003. Section 647
of P.L. 108-7, Division J (H.J.Res. 2, 108th Congress) required OMB to "provide
considered research and sound analysis" in support of its goals or face the possibility
that funds made available in the bill (which was the Consolidated Appropriations
Resolution) could not be used to apply, enforce, or establish any goal or target for
competitive sourcing. The House Committee on Appropriations report (H.Rept. 108-
243) that accompanied H.R. 2989, the FY2004 appropriations bill for Transportation,
Treasury, and Independent Agencies, directed OMB to submit reports to the Senate
and House Appropriations Committees on any new competitive sourcing targets.
H.R. 2989, as amended and passed by the Senate, also included two provisions on
competitive sourcing, though neither addressed the issue of targets or goals.

      An OMB report, Competitive Sourcing: Conducting Public-Private Competition
in a Reasoned and Responsible Manner, issued on July 24, 2003, explains
competitive sourcing strategy. Although the report did not explicitly state that it was
responding to Section 647 of P.L. 108-7, Division J, it did note that OMB had
dropped its numerical targets, opted for a collaborative (OMB-agency) process in the
development of competition plans, and revised the competitive sourcing criteria for
the executive branch management scorecard. A second OMB report, dated
September 2003, focused on agency competitive sourcing activities. In December
2003, OMB released guidance on the preparation of agency competition plans. This
report will be updated if additional guidance regarding competitive sourcing plans
or targets is released.
Contents

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Competitive Sourcing Targets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
   2000 Targets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
   2001 Targets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
   2002 Targets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
   2003 Targets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
         P.L. 108-7 (H.J.Res. 2, 108th Congress)
              Consolidated Appropriations Resolution, 2003 . . . . . . . . . . . . . . . 7
         OMB Projection for Competitive Sourcing . . . . . . . . . . . . . . . . . . . . . . 8
         OMB's July Report on Competitive Sourcing . . . . . . . . . . . . . . . . . . . 10
         H.R. 2989, Transportation, Treasury and Independent Agencies
              Appropriations Act, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
         Providing "Considered Research and Analysis" to Congress . . . . . . . 18
         OMB's Expectation: Compete 416,000 FTEs . . . . . . . . . . . . . . . . . . . 19
         OMB's September Report on Competitive Sourcing . . . . . . . . . . . . . 21
         OMB Guidance on Green Competitive Sourcing Plans . . . . . . . . . . . . 30

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Appendix A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33


List of Tables
Table 1. Revised Scorecard Criteria -- Green . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Table 2. Revised Scorecard Criteria -- Yellow . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Table 3. OMB Estimates of Commercial Activities FTEs at Agencies
    and Departments Tracked under the PMA . . . . . . . . . . . . . . . . . . . . . . . . . 23
Table 4. Number of Positions in Agency Competition Plans . . . . . . . . . . . . . . . 28
Table 5. Executive Branch Management Scorecard:
    Competitive Sourcing Ratings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
                 Federal Contracting of
                 Commercial Activities:
               Competitive Sourcing Targets

                                  Introduction
      Competitive sourcing, a term coined by the Administration of President George
W. Bush, refers to a government-wide initiative to subject activities or functions
performed by federal agencies that are deemed commercial to public-private
competition. A commercial activity is defined by the Office of Management and
Budget (OMB) as "a recurring service that could be performed by the private sector,"
whereas "an inherently governmental activity is an activity that is so intimately
related to the public interest as to mandate performance by government personnel."1
As explained by the Administrator of the Office of Federal Procurement Policy
(OFPP) in early 2002:

     Competitive sourcing is a means to an end, with the means being competition
     (generally public-private competition) and the end being better management of
     our government and better service for our citizens.2

OMB expects competitive sourcing to result in "significant performance
improvements," such as reducing costs, improving accountability, or increasing
efficiency.3




1
 U.S. Office of Management and Budget, Circular No. A-76 (Revised), May 29, 2003, pp.
D-2 and A-2. Available at [http://www.whitehouse.gov/omb/circulars/a076/a76_incl_tech_
correction.pdf], visited Jan. 3, 2005.
2
  U.S. Congress, House Committee on Armed Services, Subcommittee on Military
Readiness, statement of Angela B. Styles, Administrator, Office of Federal Procurement
Policy, unpublished hearing, 107th Cong., 2nd sess., Mar. 13, 2002, available at
[http://armedservices.house.gov/schedules/2002.html#mar02], visited Jan. 6, 2005, p. 5.
Angela Styles resigned as Office of Federal Procurement Policy Administrator effective
Sept. 15, 2003. Robert Burton served as interim Administrator until Nov. 21, 2004, when
David Savian was confirmed as the Administrator.
3
 Testimony of Office of Federal Procurement Policy Administrator Angela Styles, in U.S.
Congress, Senate Committee on Governmental Affairs, Who's Doing Work for the
Government?: Monitoring, Accountability and Competition in the Federal and Service
Contract Workforce, hearing, 107th Cong., 2nd sess., Mar. 6, 2002 (Washington: GPO, 2002),
p. 49.
                                             CRS-2

     The policy and instructions for conducting public-private competitions are found
in OMB Circular A-76 and accompanying attachments. Initially issued in 1966, the
circular was released in its most recent revised form on May 29, 2003.4

      Inventories of commercial functions and inherently governmental activities are
another component of the competitive sourcing initiative. The Federal Activities
Inventory Reform (FAIR) Act of 19985 requires federal agencies to compile lists of
their commercial activities and submit them to OMB by June 30 of each year. The
first set of inventories was produced in 1999. The requirement for agencies to
prepare lists of their inherently governmental activities and to submit them to OMB
along with their FAIR inventories was established in an OMB memorandum dated
April 3, 2001.6

     This report examines OMB's competitive sourcing targets and the executive
branch management scorecard, and shows how they have changed over time.


                     Competitive Sourcing Targets
2000 Targets
      The Bush Administration's interest in competitive sourcing apparently began
during the 2000 presidential campaign. Then-Governor George W. Bush reportedly
said in a speech on June 9, 2000:

       Today, hundreds of thousands of full-time federal employees perform tasks that
       could be done by the private sector. I will put as many of these tasks as possible
       up for competitive bidding. If the private sector can do a better job, it should get
       the contract.7

2001 Targets
     Shortly after the inauguration of President Bush, OMB issued two memoranda
on government reform, which included references to Circular A-76 competitions.
These two documents constituted the initial public announcement of what would later
be designated the Administration's competitive sourcing initiative. The first
memorandum, dated February 14, 2001, notified agencies and departments that the
President envisioned a government that would be citizen-based, results-oriented, and


4
 See also U.S. Office of Management and Budget, "Performance of Commercial Activities,"
Federal Register, vol. 68, no. 103, May 29, 2003, pp. 32134-32142; CRS Report RL32017,
Circular A-76 Revision 2003: Selected Issues, by L. Elaine Halchin.
5
    P.L. 105-270 (Oct. 19, 1998); 112 Stat. 2382; 31 U.S.C. 501 note.
6
 U.S. Office of Management and Budget, "Year 2001 Inventory of Commercial Activities,"
Memorandum M-01-16, April 3, 2001, available at [http://www.whitehouse.gov/omb/
memoranda/index.html], visited Jan. 5, 2005.
7
 Tichakorn Hill, "OMB Plans to Compete 400,000 More Jobs," Federal Times, vol. 37, no.
3, Feb. 19, 2001, p.1.
                                           CRS-3

market-driven. The five government-wide reforms announced in the memorandum
were:

       delayering management levels to streamline organizations; reducing erroneous
       payments to beneficiaries and other recipients of government funds; making
       greater use of performance-based contracts; expanding the application of on-line
       procurement and other E-Government services and information; and expanding
       A-76 competitions and [developing] more accurate FAIR Act inventories.8

     A second memorandum from OMB, issued March 9, 2001, provided additional
guidance, setting specific competitive sourcing targets for FY2002. The
memorandum directed agencies to compete or convert a minimum of 5% of the full-
time equivalents (FTEs)9 listed on their FAIR inventories using Circular A-76
procedures.10 This memorandum also included a long-term goal for competitive
sourcing:

       The President's commitment is to open at least one-half of the Federal positions
       listed on the FAIR Act inventory of commercial functions to competition with
       the private sector.11

No deadline accompanied the long-term goal. In a memorandum prepared for the
July 11, 2001, meeting of the President's Management Council, OMB reportedly
applied the 50% target to the 2000 FAIR inventories.

       Review of the 2000 FAIR Act inventories identified 850,000 civilian Full-Time
       Equivalents (FTE) performing commercial work. This figure represents 53% of
       the government's civilian workforce. The President has committed to
       incrementally opening one-half of these 850,000 FTEs, or 425,000 of the FTE[s]
       identified on the 2000 FAIR Act inventories, to public-private competition or
       direct conversion to private sector performance.12


8
 U.S. Office of Management and Budget, "Performance Goals and Management Initiatives
for the FY 2002 Budget," Memorandum M-01-11, Feb. 14, 2001, p. 2. Available at
[http://www.whitehouse.gov/omb/memoranda/index.html], visited Jan. 5, 2005.
9
 A full-time equivalent (FTE) is "[t]he staffing of Federal civilian employee positions,
expressed in terms of annual productive work hours (1,776 [hours]) rather than annual
available hours that includes non-productive hours (2,080 hours)" (U.S. Office of
Management and Budget, Circular No. A-76 (Revised), p. D-5).
10
  U.S. Office of Management and Budget, "Performance Goals and Management Initiatives
for the FY 2002 Budget," Memorandum M-01-15, March 9, 2001, p. 1, available at
[http://www.whitehouse.gov/omb/memoranda/index.html], visited Jan. 5, 2005. The direct
conversion option, which could be used only under certain circumstances, allowed agencies
to convert work from the public sector to the private sector without holding a competition
between the government and private contractors. Direct conversions are no longer
permitted. This alternative was eliminated by OMB when it wrote the 2003 revision to
Circular A-76.
11
  U.S. Office of Management and Budget, "Performance Goals and Management Initiatives
for the FY 2002 Budget," p. 1.
12
     "July 11 OMB Review of Agencies' FAIR Act Lists," Government Executive, Daily
                                                                     (continued...)
                                            CRS-4

Congressional testimony provided by the OFPP Administrator in 2002 confirmed
these figures:

        The aggregate government-wide goal, established at the outset of the initiative,
        envisions the competition of 425,000 full-time equivalent employees (FTEs) --
        i.e., 50 percent of commercial FTEs.13

     In June 2001, a second interim target was established. In correspondence sent
to federal agencies, OMB advised agency heads that the competition/conversion
target for FY2003 was an additional 10% of the FTEs listed on their FAIR
inventories.14

      A third OMB memorandum, which was issued on April 3, 2001, effected a
significant change. Whereas FAIR required the compilation of lists of commercial
activities, OMB Memorandum M-01-16 directed agencies to prepare inventories of
their inherently governmental functions and submit them with their annual FAIR
inventories to OMB.15

     In August 2001, President Bush released the President's Management Agenda
 -- FY 2002 (PMA).16 The agenda consisted of government management reforms in
five areas: competitive sourcing, human capital, financial performance, electronic
government (e-government), and budget and performance integration.17 The
executive branch management scorecard, which was introduced in the President's
FY2003 budget proposal, and the accompanying standards for success are used to
assess and rate an agency's status on the Administration's five government reforms.18
The ratings are green (successful), yellow (mixed results), and red (unsatisfactory).
To achieve a green rating, an agency would have to:




12
  (...continued)
Briefing, July 23, 2001, available at [http://www.govexec.com/dailyfed/0701/072301p1a.
htm], visited Jan. 5, 2005.
13
  U.S. Congress, House Committee on Government Reform, Subcommittee on Technology
and Procurement Policy, Oversight Hearing to Review the Findings of the Commercial
Activities Panel, hearing, 107th Cong., 2nd sess., Sept. 27, 2002 (Washington: GPO, 2003),
p. 43.
14
  Information provided electronically by the Office of Federal Procurement Policy, Jan. 14,
2003.
15
 U.S. Office of Management and Budget, "Year 2001 Inventory of Commercial Activities,"
Memorandum M-01-16, April 3, 2001, available at [http://www.whitehouse.gov/omb/
memoranda/index.html], visited Jan. 5, 2005, p. 1.
16
  U.S. Office of Management and Budget, The President's Management Agenda -- FY
2002, (Washington: OMB, Aug. 2001).
17
  See CRS Report RS21416, The President's Management Agenda: A Brief Introduction,
by Virginia A. McMurtry.
18
     Ibid., p. 10.
                                             CRS-5

        [Complete] public-private or direct conversion competitions on not less than 50%
        of the full-time equivalent employees listed on the approved FAIR Act
        inventories;

        [Conduct] competitions and direct conversions ... pursuant to [an] approved
        competition plan; [and]

        [Ensure that] commercial reimbursable support service arrangements between
        agencies ... [were] competed with the private sector on a recurring basis.19

An agency that achieved some, but not all, of the green criteria, and avoided any red
conditions, would earn a yellow rating. An agency that met one or more of the
following criteria would earn a red rating:

        Completed public-private or direct conversion competition[s] on less than 15
        percent of the full-time equivalent employees listed on the approved FAIR Act
        inventories.

        [Did not conduct] competitions and direct conversions ... in accordance with
        approved competition plan.

        No commercial reimbursable support service arrangements between agencies ...
        [were] competed with the private sector.20

Information about agency ratings on the competitive sourcing initiative, from 2002
through 2004, is available in Appendix A.

2002 Targets
      No additional interim goals were announced in 2002, but two notable
developments concerning competitive sourcing targets occurred during the year.
Initially, agencies were expected to compete a total of 15% of their commercial FTEs
by the end of FY2003. Congressional testimony provided by the then-Administrator
of OFPP in March affirmed that this had been the original goal.

        We put 15 percent up over 2 years as a goal that we thought was appropriate for
        almost every department and agency to meet because they had not subjected, as
        a general proposition -- particularly at the civilian agencies -- they had never
        subjected any of these jobs that are clearly commercial in nature to the pressures
        of competition.21


19
   U.S. Office of Management and Budget, Competitive Sourcing: Conducting Public-
Private Competition in a Reasoned and Responsible Manner, July 2003, p. 1, available at
[http://www.whitehouse.gov/omb/procurement/comp_sourcing_072403.pdf], visited Jan.
5, 2005, Attachment B.
20
     Ibid.
21
 Testimony of Office of Federal Procurement Policy Administrator Angela Styles, in U.S.
Congress, Committee on Governmental Affairs, Who's Doing Work for the Government?:
Monitoring, Accountability and Competition in the Federal and Service Contract
                                                                        (continued...)
                                            CRS-6

    However, the Administrator also noted that OMB had begun working with
agencies to develop goals suited to their particular circumstances.

        [W]e sat down with each department and agency over the period of the past, I
        would say 6 to 9 months, to determine what was an appropriate plan for that
        agency. There are agencies where it is not appropriate right now for them to be
        competing 15 percent.22

     Next, at a hearing in September, the Administrator explained that the combined
target of 15% was a government-wide goal, not a goal that each agency was required
to meet.

        I would like to take an opportunity to clarify what is a tremendous amount of
        confusion and misrepresentation about our goals. First, it's an aggregate 15
        percent governmentwide goal. It's not 15 percent at each agency.23

     Criticism of OMB's competitive sourcing targets surfaced in 2002. The primary
allegation was that the goals or targets were arbitrary. In March, for example,
Senator George V. Voinovich voiced his concerns about OMB's targets.

        I am concerned that the benchmarks the administration has adopted for its
        competitive sourcing are arbitrary and potentially damaging, as were the Clinton
        Administration's downsizing efforts. What measurement criteria did the
        administration use to come up with a 50 percent figure? What is the logic behind
        it?24

     In April, the Commercial Activities Panel (CAP) issued its report on Circular
A-76 and related issues.25 One of the panel's recommendations was that the
government adopt 10 sourcing principles developed by CAP. The sixth principle
was: "Avoid arbitrary full-time equivalent (FTE) or other arbitrary numerical goals."
While the panel did not comment explicitly about the Administration's competitive
sourcing targets, it did explain its rationale for avoiding arbitrary goals.



21
 (...continued)
Workforce, p. 18.
22
     Ibid.
23
  U.S. Congress, House Committee on Government Reform, Subcommittee on Technology
and Procurement Policy, Oversight Hearing to Review the Findings of the Commercial
Activities Panel, p. 139.
24
 U.S. Congress, Senate Committee on Governmental Affairs, Who's Doing Work for the
Government?: Monitoring, Accountability and Competition in the Federal and Service
Contract Workforce, pp. 19-20.
25
  The Commercial Activities Panel (CAP) was established at the direction of Section 832
of P.L. 106-398. Convened in spring 2001 by the Comptroller General, the panel was
charged with examining Circular A-76 and FAIR. Members included senior federal
government officials, industry and union representatives, and competitive sourcing experts.
After a year-long study, CAP released its report, Improving the Sourcing Decisions of the
Government, on April 30, 2002.
                                              CRS-7

        This principle reflects an overall concern about arbitrary numbers driving
        sourcing policy or specific sourcing decisions. The success of government
        programs should be measured by the results achieved in terms of providing value
        to the taxpayer, not the size of the in-house or contractor workforce. Any FTE
        or other numerical goals should be based on considered research and analysis.
        The use of arbitrary percentage or numerical targets can be counterproductive.26

    Later in 2002, the Comptroller General commented, in correspondence and in
congressional testimony, on OMB's targets.

        I have seen no evidence to indicate that [OMB's] numerical FTE goals were
        based on considered research and sound analysis.... In addition, I am not aware
        that OMB's FTE goals took into full account the capacity of agencies,
        particularly civilian agencies, to conduct public-private competitions.27

        ... I believe the administration's current quotas, targets, call it whatever you want,
        violate the [sourcing] principles [recommended by CAP], because they are
        arbitrary.28

     OMB's response to these charges was that the interim goals were an effort to
prompt agencies to establish the infrastructure necessary to conduct competitions.
At a hearing in September, the then-Administrator of OFPP elaborated on this point.

        Let me be clear about the application of this aggregate government-wide goal [of
        15%]. It is not intended as an arbitrary quota, such as the ones that were put into
        effect through most of the 1990s when the workforce was reduced by 324,580
        FTEs .... Like you, Mr. Chairman [Representative Thomas M. Davis], I have
        always opposed arbitrary FTE cuts and caps. As this Subcommittee has heard
        me say before, competitive sourcing is not about outsourcing or downsizing the
        workforce. To the contrary, it is about creating incentives and opportunities for
        efficiency and innovation through competition.... Thus, as we work with agencies
        and evaluate their progress, the real issue is whether an agency's plan first builds
        an infrastructure for public-private competition and then implements
        competitions over the long-term. While OMB will presume that an agency has
        built such an infrastructure if it competes 15 percent of its commercial FTEs, we
        have been careful not to apply this goal in a rigid or arbitrary manner.29

2003 Targets
   P.L. 108-7 (H.J.Res. 2, 108th Congress) Consolidated Appropriations
Resolution, 2003. Congressional interest in the Administration's competitive


26
  Commercial Activities Panel, Improving the Sourcing Decisions of the Government
(Washington: GAO, 2002), p. 47.
27
 David M. Walker, Comptroller General, "Commercial Activities Panel: Use of Numerical
Goals," letter to Senator George V. Voinovich, Aug. 9, 2002, GAO-02-1022R, p. 2.
28
  U.S. Congress, House Committee on Government Reform, Subcommittee on Technology
and Procurement Policy, Oversight Hearing to Review the Findings of the Commercial
Activities Panel, p. 137.
29
     Ibid., pp. 43-44.
                                           CRS-8

sourcing targets, and the question of whether the goals were arbitrary or were the
result of research and analysis, were reflected in Section 647 of P.L. 108-7, Division
J, the Consolidated Appropriations Resolution, 2003. The legislation was signed by
the President on February 20, 2003.30 In an effort to prevent the use of arbitrary
quotas and to learn more about OMB's development of its competitive sourcing
targets, Congress included this provision in P.L. 108-7:

     While nothing in this section shall prevent any agency of the executive branch
     from subjecting work performed by Federal Government employees or private
     contractors to public-private competition or conversions, none of the funds made
     available in this Act may be used by an agency of the executive branch to
     establish, apply, or enforce any numerical goal, target, or quota for subjecting the
     employees of the executive agency to public-private competitions or for
     converting such employees or the work performed by such employees to private
     contractor performance under the Office Management and Budget Circular A-76
     or any other administrative regulation, directive, or policy unless the goal, target,
     or quota is based on considered research and sound analysis of past activities and
     is consistent with the stated mission of the executive agency.

The accompanying conference report provided additional guidance:

     If any goals, targets, or quotas are established following "considered research
     and sound analysis" under the terms of this provision [Section 647], the
     conferees direct the Office of Management and Budget to provide a report to the
     Committees on Appropriations no later than 30 days following the announcement
     of those goals, targets, or quotas, specifically detailing the research and sound
     analysis that was used in reaching the decision.31

      OMB Projection for Competitive Sourcing. In April 2003, the
Administration reportedly revised the executive branch management scorecard
criteria and its goals for competitive sourcing and the other four PMA reforms. Clay
Johnson III, who was the nominee for the position of Deputy Director for
Management at OMB at the time, and was confirmed subsequently, sent a
memorandum dated April 17, 2003,32 to the President's Management Council that
included projections from the managers of the five government-wide initiatives for
their respective reforms. The projections listed revised scorecard criteria and the
accomplishments that each manager expected for his or her program by July 1, 2004.
The revised criteria for a green rating on the executive branch management scorecard
were:




30
  P.L. 108-7 (Feb. 20, 2003); 117 Stat. 11, at 474; Consolidated Appropriations Resolution,
2003.
31
  U.S. Congress, Conference Committee, 2003, Making Further Continuing Appropriations
for the Fiscal Year 2003, and for Other Purposes, conference report to accompany H.J.Res.
2, H.Rept. 108-10, 108th Cong., 1st sess. (Washington: GPO, 2003), p. 1343.
32
  Jason Peckenpaugh, "OMB Sets New Targets for Management Agenda," Government
Executive, Daily Briefing, May 21, 2003, available at [http://www.govexec.com/dailyfed/
0503/052103p1.htm], visited Jan. 5, 2005.
                                          CRS-9

        Agency has initiated plans to complete competitions on 50% of federal
        government's commercial activities (appropriate percentage and timing
        determined for each agency individually);

        Agency has completed at least 10 standard competitions since January `01;

        Agency completes 90% of all standard competitions in 12-month timeframe since
        June `03;

        Agency completes 95% of all streamlined competitions in 90-day timeframe
        since June `03;

        Agency cancels less than 10% of publicly announced standard and streamlined
        competitions since June `03;

        Agency consistently identifies commercial and inherently governmental
        activities; [and]

        All commercial activities exempt from competition have OMB-approved
        justifications.33

The revised criteria for yellow were:

        Agency has completed the implementation of an OMB approved competition
        plan for 2002-2003;

        Agency has completed one standard competition or has publicly announced
        standard competitions that exceed approved competition plans for 2002-2003;

        Agency completes 75% of streamlined competitions in 90-day timeframe;

        Agency cancels less than 20% of publicly announced standard and streamlined
        competitions; [and]

        Agency has initiated plans to consistently identify commercial and inherently
        governmental inventories throughout the agency.34

The 2004 projection for competitive sourcing included these goals:

        [50% of all agencies will have] people, systems and resources ... in place to
        conduct more than five public/private competitions a year in each agency;

        75% of all agencies will have completed competitions within an average of 12
        months;




33
  "OMB `Proud to Be' Assessment for Competitive Sourcing," Government Executive,
Daily Briefing, Nov. 4, 2003, available at [http://www.govexec.com/dailyfed/0503/0503p1a.
htm], visited Jan. 5, 2005.
34
     Ibid.
                                           CRS-10

        Competitions for 15% of government's commercial activities will have been
        initiated or completed;

        $1.5 billion in annual savings from completed competitions will have been
        realized;

        60% of all agencies will have demonstrated improved productivity;

        Stretch goal: If DOD commits to subject an additional 130,000 positions to
        competitions, the civilian agencies will subject additional positions to
        competition.35

These revised criteria and goals were in place for only a few months before OMB
opted for a different approach to competitive sourcing.

     OMB's July Report on Competitive Sourcing. In July 2003, OMB
announced that it had abandoned its numerical goals and that agencies would develop
customized competition plans. However, the Administration's executive branch
management scorecard remains in place, and OMB issued new criteria for the
competitive sourcing portion. These changes were provided in congressional
testimony by the then-OFPP Administrator on July 24, 2003, and were presented in
an OMB report, Competitive Sourcing: Conducting Public-Private Competition in
a Reasoned and Responsible Manner (hereafter referred to as the "competitive
sourcing report"), which was released the same day.

      In its July 24, 2003 report, OMB described the Administration's "strategy for
institutionalizing public-private competition ..." and explained how its approach
toward the establishment and application of goals had changed. The strategy
includes:

        1. Agency-specific competition plans that are customized, based on considered
        research and sound analysis, to address the agency's mission and workforce mix;
        and will be continually refined to reflect changed circumstances, improved
        insight into agency programs, and experiences with conducting competitions;

        2. A dedicated infrastructure within each agency to promote sound and
        accountable decision making; and

        3. Improved processes for the fair and efficient conduct of public-private
        competition.36

     In an explanation of its initial decision to use competitive sourcing goals and its
subsequent decision to eliminate these targets, OMB stated:




35
     Ibid.
36
   U.S. Office of Management and Budget, Competitive Sourcing: Conducting Public-
Private Competition in a Reasoned and Responsible Manner, July 2003, p. 1. (italics in
original)
                                         CRS-11

     To begin the process of opening commercial activities identified on workforce
     inventories to competition, OMB instructed agencies to complete competitions
     on 5 percent of these activities by the end of fiscal year 2002 and an additional
     10 percent by the end of fiscal year 2003. These figures were intended to ensure
     a level of commitment that would help institutionalize use of the tool within each
     agency.... With experience, OMB recognized that its initial numerically-based
     directions were inadequate. The guidance provided no management incentives
     or disincentives, no process for evaluating progress, and no mechanism for
     interacting with the agencies to reinforce strengths and correct weaknesses. To
     address these concerns, OMB created scorecards to measure progress using a
     traffic-light (i.e., "red-yellow-green") grading system.... Under the scorecard
     approach, numerical mandates were converted to incentives: an agency would
     move from a "red" score to a "yellow" score if it completed competitions for
     15% of the total commercial positions listed on their inventories.... The 50%
     figure was meant to ensure that the dynamics of competition would be brought
     to bear on a significant portion of commercial activities over time.... Through
     individual interactions with the agencies to evaluate progress, OMB learned that
     baselines would need to vary based on mission needs and conditions unique to
     the agency. Through individual interactions with the agencies to evaluate
     progress, OMB learned that baselines would need to vary based on mission needs
     and conditions unique to the agency.37

     In congressional testimony provided the same day that the OMB report was
issued, the then-Administrator of OFPP described how agencies prepare their
competition plans.

     The preparation of competition plans begins with the development of workforce
     inventories, as required by OMB guidance and the Federal Activities Inventory
     Reform (FAIR) Act. Agencies first differentiate inherently governmental
     activities from commercial activities.... Agencies then separate commercial
     activities that are available for competition from those that are not. In deciding
     whether a commercial activity is inappropriate for potential performance by the
     private sector, agencies take various factors into consideration, such as the
     unavailability of private sector expertise, preservation of core competencies, or
     the need for confidentiality in support of senior level decision making.... Once
     an agency has identified commercial activities available for competition, they
     consider, in a disciplined way, which of these might benefit most from
     comparison with the private sector. Agencies are generally focusing use of
     public-private competition on commonly available routine commercial services
     where there are likely to be numerous capable and highly competitive private
     sector contractors worthy of comparison to agency providers. They also consider
     factors such as workforce mix, attrition rates, capacity to conduct reviews, the
     percentage of service contracts, and the strength of the agency's contract
     management capabilities.38




37
  U.S. Office of Management and Budget, Competitive Sourcing: Conducting Public-
Private Competition in a Reasoned and Responsible Manner, July 2003, pp. 4-5.
38
  U.S. Congress, Senate Committee on Governmental Affairs, Subcommittee on Oversight
of Government Management, the Federal Workforce, and the District of Columbia, Then
and Now: An Update on the Bush Administration's Competitive Sourcing Initiative, hearing,
108th Cong., 1st sess., July 24, 2003 (Washington: GPO, 2004), pp. 59-60.
                                     CRS-12

      OMB's competitive sourcing report provided sample profiles of agency
competition plans. For each agency listed, the profile identified the number of
positions and examples of commercial activities in the competition plan, and also
listed examples of commercial activities excluded from the plan. The report also
noted that OMB would provide information by September 26, 2003, on agencies it
tracks.39

     OMB also used its 2003 competitive sourcing report to announce that it had
revised the competitive sourcing criteria for the executive branch management
scorecard. The first column of Table 1 is a verbatim listing of OMB's criteria for a
"green" rating. The second column sets forth possible questions that could be raised
and comments that could be made by agencies seeking to earn a "green" rating.




39
  U.S. Office of Management and Budget, Competitive Sourcing: Conducting Public-
Private Competition in a Reasoned and Responsible Manner, July 2003, p. 6.
                                      CRS-13

            Table 1. Revised Scorecard Criteria -- Green

               Criteria                                      Analysis
         An agency must have:
An approved "green" competition plan to     1. Does the criteria for a green
compete commercial activities available     competition plan differ substantially from
for competition.a                           OMB's initial plan to have agencies
                                            compete 50% of their commercial FTEs?
                                            2. What was the rationale for selecting
                                            FY2008 as the target date to have
                                            competitions publicly announced?
Publicly announced standard                 1. Apparently, an agency will have to
competitions in accordance with the         announce publicly all standard
schedule outlined in the agency "green"     competitions listed in its competitive
competition plan.                           sourcing plan in order to receive credit
                                            for this standard.
                                            2. Streamlined competitions are not
                                            included in this standard.
Since January 2001, completed at least 10   1. Does this item refer to standard
competitions (no minimum number of          competitions, streamlined competitions,
positions required per competition).        or both?
                                            2. Why does the measurement period
                                            begin January 2001?
In the past year, completed 90% of all      1. An agency that announces and
standard competitions in a 12-month time    completes only one standard competition
frame.                                      within 12 months will receive credit for
                                            this criterion. An agency that undertakes
                                            10 standard competitions, but completes
                                            only eight within the 12-month time
                                            frame will not receive credit for this
                                            criterion.
                                            2. How many agencies have sufficient
                                            resources and infrastructure to complete
                                            90% of all standard competitions within
                                            the time frame?
                                            3. Apparently, an agency will not receive
                                            credit for competitions for which the
                                            competitive sourcing official has granted
                                            a time limit waiver.b
In the past year, completed 95% of all      1. An agency that announces and
streamlined competitions in a 90-day time   completes only one streamlined
frame.                                      competition within 90 days will receive
                                            credit for this criterion. An agency that
                                            undertakes 10 streamlined competitions,
                                            but completes only nine within the 90-
                                            day time frame will not receive credit for
                                            this criterion.
                                            2. How many agencies have sufficient
                                            resources and infrastructure to complete
                                            95% of all streamlined competitions
                                               CRS-14

                   Criteria                                              Analysis
             An agency must have:
                                                      within the time frame?
                                                      3. If an agency decides to create a most
                                                      efficient organization (MEO) for a
                                                      function undergoing a streamlined
                                                      competition, what is the probability that
                                                      the agency will meet the 90-day deadline
                                                      and develop a competitive agency tender
                                                      and most efficient organization (MEO)?c
                                                      4. Apparently, an agency will not receive
                                                      credit for competitions for which the
                                                      competitive sourcing official has granted
                                                      a time limit waiver.d
 In the past year, canceled fewer than 10%            An agency that announces and completes
 of publicly announced standard and                   one standard or one streamlined
 streamlined competitions.                            competition will receive credit for this
                                                      criterion. An agency that undertakes 10
                                                      standard or streamlined competitions, and
                                                      then cancels a minimum of two will not
                                                      receive credit for this criterion.
 OMB-approved justifications for all                  Circular A-76 does not state explicitly
 categories of commercial activities                  that agencies must obtain OMB approval
 exempt from competition.                             for written justifications for functions
                                                      assigned reason code A.e

Source: U.S. Office of Management and Budget, Competitive Sourcing: Conducting Public-Private
Competition in a Reasoned and Responsible Manner, July 2003, p. 1, available at
[http://www.whitehouse.gov/omb/procurement/comp_sourcing_072403.pdf], visited Jan. 5, 2005, p.
8.

Notes:
a. OMB guidance on the preparation of green competition plans was issued December 22, 2003. The
       document is available at [http://www.whitehouse.gov/omb/procurement/index.html], visited Jan.
       5, 2005.
b. A competitive sourcing official (CSO) may grant a time limit waiver of up to six months for a
       standard competition. Under the 2003 revision to Circular A-76, agencies are required to
       designate a CSO (an assistant secretary or equivalent level official) who will have responsibility
       for implementing the circular.. (U.S. Office of Management and Budget, Circular No. A-76
       (Revised), May 29, 2003, pp. 1 and B-6, available at [http://www.whitehouse.gov/omb/
       circulars/a076/a76_incl_tech_correction.pdf], visited Feb. 10, 2004.)
c. An agency tender is the government's response to a solicitation. The MEO is the staffing plan of
       the agency tender. It is the entity that would perform the work where the government wins the
       competition. A competitive agency tender (or MEO) is one that has a reasonable chance of
       being selected to perform the work.
d. A CSO may grant a time limit waiver of up to 45 days for a streamlined competition (U.S. Office
       of Management and Budget, Circular No. A-76 (Revised), p. B-5).
e. Ibid., p. A-3.

     The first column of Table 2 is a verbatim listing of OMB's criteria for a
"yellow" rating. The second column sets forth possible questions that could be raised
and comments that could be made by agencies seeking to earn a "yellow" rating.
                                        CRS-15

            Table 2. Revised Scorecard Criteria -- Yellow

                Criteria                                       Analysis
          An agency must have:
An OMB approved "yellow" competition          1. Apparently, OMB and each agency
plan to compete commercial activities         will determine jointly how many FTEs
available for competition.                    must be competed in order for a
                                              competition plan to be approved by OMB
                                              as a "yellow" plan.a What are the other
                                              criteria, if any, for an approved yellow
                                              plan?
                                              2. What are the components of a yellow
                                              plan?
Completed one standard competition or         Are these two criteria comparable?
publicly announced standard
competitions that exceed the number of
positions identified for competition in the
agency's "yellow"competition plan.
In the past two quarters, completed 75%       1. How many agencies have sufficient
of streamlined competitions in a 90-day       resources and infrastructure to complete
time frame.                                   75% of all streamlined competitions
                                              within the 90-day time frame?
                                              2. Why is there no criterion for
                                              completing a specific percentage of
                                              standard competitions within the 12-
                                              month time frame?
                                              3. If an agency decides to create an MEO
                                              for a function undergoing a streamlined
                                              competition, what is the probability that
                                              the agency will meet the 90-day deadline
                                              and develop a competitive MEO?b
                                              4. Why is the measurement period two
                                              quarters instead of one year? (The
                                              measurement period for the comparable
                                              "green" criterion is one year.)
                                              5. An agency that announces and
                                              completes only one streamlined
                                              competition within 90 days will receive
                                              credit for this criterion. An agency that
                                              undertakes 10 streamlined competitions,
                                              but completes only 7 within the 90-day
                                              time frame, will not receive credit for this
                                              criterion.
                                              6. Apparently, an agency will not receive
                                              credit for competitions for which the
                                              competitive sourcing official has granted
                                              a time limit waiver.c
In the past two quarters, canceled less       1. An agency that announces and
than 20% of publicly announced standard       completes only one standard or one
and streamlined competitions.                 streamlined competition will receive
                                              credit for this criterion. An agency that
                                             CRS-16

                  Criteria                                            Analysis
            An agency must have:
                                                   undertakes 10 standard or streamlined
                                                   competitions, and then cancels a
                                                   minimum of three, will not receive credit
                                                   for this criterion.
                                                   2. Why is the measurement period two
                                                   quarters instead of one year? (The
                                                   measurement period for the comparable
                                                   "green" criterion is one year.)

Source: U.S. Office of Management and Budget, Competitive Sourcing: Conducting Public-Private
Competition in a Reasoned and Responsible Manner, July 2003, p. 1, available at
[http://www.whitehouse.gov/omb/procurement/comp_sourcing_072403.pdf], visited Jan. 5, 2005, pp.
7-8.

Notes:
a. U.S. Office of Management and Budget, Competitive Sourcing: Conducting Public-Private
     Competition in a Reasoned and Responsible Manner, p. 6.
b. Under the 2003 revision to Circular A-76, an MEO is required for a standard competition, but it is
     optional for a streamlined competition.
c. A competitive sourcing official (CSO) may grant a time limit waiver of up to 45 days for a
     streamlined competition. Under the 2003 revision to Circular A-76, agencies are required to
     designate CSO (an assistant secretary or equivalent level official) who will have responsibility
     for implementing the circular. (U.S. Office of Management and Budget, Circular No. A-76
     (Revised), May 29, 2003, pp. B-5 and 1, available at [http://www.whitehouse.gov/omb/
     circulars/a076/a76_ incl _tech_correction.pdf], visited Jan. 5, 2005).

      In summary, OMB's initial competitive sourcing efforts, particularly those
efforts related to targets or goals, sought to institutionalize public-private competition
across the federal government and spur the development of sufficient infrastructure
within agencies for carrying out competitive sourcing tasks and activities. The initial
goals remained in place, with some modification -- which lasted briefly, as a result
of Clay Johnson III's April 17 memorandum -- until the then-OFPP Administrator's
congressional testimony on July 24, 2003. There does not appear to be any publicly
available information that documents whether OMB's goals were successful in
prompting agencies to establish infrastructures sufficient for conducting competitions
and performing related tasks. If only some agencies were successful in this area, it
remains to be seen what means OMB might use to continue to promote infrastructure
development among federal agencies. Another related issue is whether OMB plans
to assess the capability of each agency to handle its competitive sourcing workload.
While the revised scorecard criteria may provide some insight into these issues, the
criteria alone may not be sufficient. The criteria tend to focus on output. However,
output-based criteria are not necessarily well-suited to measuring other features or
characteristics, such as agency capacity or the quality of competitions and
inventories.

      H.R. 2989, Transportation, Treasury and Independent Agencies
Appropriations Act, 2004. The House Committee on Appropriations report that
accompanied the Transportation, Treasury, and Independent Agencies appropriations
bill for FY2004 (H.R. 2989, 108th Congress) included a recommendation concerning
competitive sourcing targets. The committee report stated:
                                         CRS-17

     The statement of the managers accompanying the Treasury and General
     Government Appropriations Act, 2003 [P.L. 108-7] directed OMB to "provide
     a report to the Committees on Appropriations no later than 30 days following the
     announcement of those [competitive sourcing] goals, targets, or quotas,
     specifically detailing the research and sound analysis that was used in reaching
     the decision." Although the 15 percent competitive sourcing target has been
     reiterated on several occasions since the enactment of that Act, OMB's position
     is that the reporting requirement has not been triggered because no new target
     has been announced. The Committee notes that the 15 percent target is
     government-wide, and separate targets could be established for individual
     agencies depending on their circumstances. To the extent that OMB establishes
     individual agency targets in its internal guidance, the agency is directed, within
     30 days of establishing such targets, to submit a report to the House and Senate
     Committees on Appropriations that indicates each agency's competitive sourcing
     target. The report should specifically detail the research and analysis that was
     used in determining each agency's individual target, goal or quota. To the extent
     that such targets change over time, OMB is directed to maintain an up-to-date
     record of such changes and convey the changes periodically to the House and
     Senate Committees on Appropriations and the appropriate legislative
     committees.40

      H.R. 2989 was enacted as Division F of P.L. 108-199, which came to be known
as the Consolidated Appropriations Act for FY2004.41 The competitive sourcing
provisions are found in Section 647. Section 647(a), which apparently applies only
to those federal agencies that receive appropriated funds under Division F, requires
agencies, for certain types of public-private competitions, to prepare a plan for a most
efficient organizations and to take into consideration how the conversion differential
would affect the contractor's cost estimate. Sections 647(a) through (e) are thought
to apply government-wide. Section 647(b) requires agency heads to submit annual
reports to Congress on their competitive sourcing activities. Required elements
include the number of completed competitions; the number of announced, but not yet
completed, competitions; the number of FTEs associated with completed and
announced competitions; the cost of conducting competitions; estimated savings;
actual savings; the projected number of FTEs scheduled to be competed in the next
fiscal year; and a description of the agency's competitive sourcing decision-making
process. The initial report is due 120 days after the date of enactment, which was
January 23, 2004. The remainder of Section 647 allows agency heads to establish a
performance period greater than five years for any agency function that was won by
federal employees in a public-private competition; permits agency heads to use
appropriated funds for monitoring the performance of any activity that has been
subjected to a public-private competition; and requires that any work converted to
contractor performance cannot be moved to a location outside the United States if the
work had previously been performed by federal government employees within the
United States.



40
  U.S. Congress, House Committee on Appropriations, Departments of Transportation and
Treasury and Independent Agencies Appropriations Bill, report to accompany H.R. 2989,
108th Cong., 1st sess., H.Rept. 108-243 (Washington: GPO, 2003), pp. 167-168.
41
 H.R. 2673, Agriculture, Rural Development, Food and Drug Administration, and Related
Agencies Appropriations Act for FY2004.
                                          CRS-18

      Providing "Considered Research and Analysis" to Congress. It is
unclear whether OMB's 2003 report qualifies as an appropriate response to the
requirement for providing considered research and analysis on competitive sourcing
goals to Congress, as required by P.L. 108-7 and reaffirmed by House action on H.R.
2989 in 2003. Without explicitly stating that it was responding to Congress's request
for information, OMB's report provided an explanation for its initial goals of 5%,
10%, and 50%, and stated that OMB had dropped these goals in favor of targets
established through a collaborative process between itself and agencies.42 Should the
explanation for OMB's interim and long-term goals be deemed insufficient, the fact
that OMB has abandoned these goals could possibly be construed as relieving it of
the responsibility to provide considered research and analysis for its original targets.

     Nevertheless, it is possible that interest in competitive sourcing targets, and
OMB's role in their development, could continue. Should Congress wish to obtain
the research and analysis used to develop agency competition plans, it may need to
contact federal agencies and departments, including OMB. Language in OMB's
competitive sourcing report noted that

     [a]gencies have developed competition plans using their commercial inventories
     as a baseline.43 Specifically, agencies have considered, in a disciplined way,
     which of the commercial activities available for competition might benefit most
     from comparison with the private sector. Agency decisions have been informed
     by a wide variety of factors, including, but not limited to: workforce mix,
     attrition rates, capacity to conduct reviews, the percentage of service contracts,
     and the strength of the agency's contract management capabilities.44

OMB also acknowledged its role in agency competition plans.

     Through individual interactions with the agencies to evaluate progress, OMB
     learned that baselines would need to vary based on mission needs and conditions
     unique to the agency.45 OMB reviewed all agency baselines and negotiated new
     baselines with a number of agencies. These negotiations, in combination with
     the continued broad discretion afforded to agencies to identify appropriate




42
  However, in a written response to a July 24, 2003 letter from Senator Joseph Lieberman
on competitive sourcing targets, OMB Director Joshua B. Bolten stated that OMB's
competitive sourcing report, also dated July 24, 2003, included "facts, rationale, and strategy
supporting competitive sourcing." (Joshua B. Bolten, Director, U.S. Office of Management
and Budget, letter to Senator Joseph Lieberman, July 30, 2003.)
43
   The use of past tense in this passage suggests that OMB had dropped its initial goals and
had begun working with agencies on customized competition plans prior to the release of
its July 24, 2003 report.
44
  U.S. Office of Management and Budget, Competitive Sourcing: Conducting Public-
Private Competition in a Reasoned and Responsible Manner, July 2003, p. 4.
45
  The competitive sourcing report did not define or explain its use of the term "baselines."
Apparently, the reference in the second passage concerned the number of FTEs sufficient
for an agency to earn a yellow rating on its scorecard. (Information provided by the U.S.
Office of Management and Budget by telephone to the author, Aug. 18, 2003.)
                                           CRS-19

        commercial activities, have allowed agencies to create customized plans for the
        successful application of public-private competition.46

     An agency develops its own competition plan, presumably following the process
described in OMB's competitive sourcing report.47 However, it appears that this is
only an initial plan. The final plan is a product of negotiations between the agency
and OMB.48 The rationale for a final plan could include, in addition to an agency's
documentation, the research and analysis OMB used in making its determination
about the contents of the agency's plan and any changes that resulted from OMB-
agency negotiations.

      The recommendation in the report accompanying H.R. 2989 notes that, in the
event that "OMB establishes individual agency targets in its internal guidance," a
report on competitive sourcing targets is due to the House and Senate Appropriations
Committees. The question is how to interpret "internal guidance." A broad
interpretation could include written and verbal guidance, including negotiations
between OMB and agencies. A possible benefit of increasing the visibility of OMB's
guidance to agencies could be to dispel any concerns that OMB's expectations or
instructions are communicated, treated, or perceived as targets. Encouraging or
requesting agencies to publicize their competition plans prior to entering into
negotiations with OMB also could shed light on this phase of the competition plan
process. On the other hand, increased visibility of the process, particularly
communications between agencies and OMB, could disrupt the development of
agency competition plans and provide an opportunity for outside parties to attempt
to influence the process.

     OMB's Expectation: Compete 416,000 FTEs. By dropping the 50%
target, it would appear OMB had abandoned its goal of ensuring that "the dynamics
of competition would be brought to bear on a significant portion of commercial
activities."49 However, as OMB noted in its July 2003 report, "approximately 26%
of the workforce from agencies being tracked under the PMA are engaged in
commercial activities that should be available for competition."50 This statement
could possibly be construed as a prescription for federal government agencies.

     The 26% equates to 416,000 FTEs.51 OMB estimated that there are 751,000
inherently governmental FTEs and 858,000 commercial FTEs. The number of

46
  U.S. Office of Management and Budget, Competitive Sourcing: Conducting Public-
Private Competition in a Reasoned and Responsible Manner, July 2003, p. 5.
47
     Ibid., pp. 3-4.
48
     Ibid., p. 5.
49
  U.S. Office of Management and Budget, Competitive Sourcing: Conducting Public-
Private Competition in a Reasoned and Responsible Manner, July 2003, p. 5.
50
     Ibid., p. 3.
51
  In its competitive sourcing report, OMB did not specify whether the figures in its
aggregate workforce profile are FTEs, positions, or some other unit of measurement.
Because it is standard practice to use FTEs when discussing competitive sourcing issues and
policies, it is likely that OMB's figures are FTEs.
                                        CRS-20

commercial FTEs includes 442,000 identified as commercial, but not available for
competition, and 416,000 identified as commercial and available for competition.52
OMB's report does not identify the source of these figures, and it does not include
an explanation of how commercial functions were sorted into the "available" and
"not available" categories. FAIR inventories reportedly were the source of these
numbers, and reason codes were used to determine whether a commercial function
should be classified as available or not available for competition.53

     According to OMB's estimate, the number of commercial FTEs available for
competition is 416,000. This figure represents 48% of the total number of
commercial FTEs, and it is comparable to the original long-term target for
competitive sourcing, 50%, which equated to 425,000 FTEs. While OMB elected to
eliminate the 50% long-term goal, it apparently expects agencies to compete 100%
of the commercial functions identified as available for competition. In a media
interview, the then-Administrator of OFPP stated:

     What we're looking for is for an agency to have a plan in place -- and a pretty
     aggressive plan -- to compete anything that's open to competition. Look at the
     green standard on the scorecard, which says we contemplate having a plan in
     place at every department and agency to compete every activity that is
     commercial in nature and open to competition. To get to green we want pretty
     significant plans in place to compete any activity that is commercial in nature.
     That's about 418,000 [jobs].54

The Administrator also reportedly said, "We still expect agencies to compete
everything open to competition."55 This statement might reflect the possibility that
the number of commercial activities available for competition could fluctuate from
year to year. Freed from blanket targets, such as the initial goals of 5% and 10% that
each agency was expected to meet, agency personnel might, in reviewing their
commercial and inherently governmental lists, determine that some functions had
been erroneously classified. While it is easy to move functions from an inherently
governmental inventory to a FAIR inventory, or to shift an activity on a commercial
list from reason code A to reason code B, to do the reverse requires more work.


52
  U.S. Office of Management and Budget, Competitive Sourcing: Conducting Public-
Private Competition in a Reasoned and Responsible Manner, July 2003, p. 3.
53
  Information provided by the U.S. Office of Management and Budget by telephone to the
author, Aug. 8 and 18, 2003. Commercial functions listed on FAIR inventories are assigned
reason codes. A reason code indicates the status of a function with regard to competitive
sourcing. Reason code A indicates a function is not suited for private sector performance.
Reason code B indicates that a function is appropriate for private sector performance. All
six reason codes are described in U.S. Office of Management and Budget, "Year 2003
Inventories of Commercial and Inherently Governmental Activities," Memorandum M-03-
09, Mar. 14, 2003, available at [http://www.whitehouse.gov/omb/memoranda/index.html],
visited Jan. 5, 2005.
54
  "`No Two Agencies Are Alike': Quotas Unworkable, But Competitive Sourcing Still a
Priority, Styles Says," Federal Times.com. Aug, 4, 2003.
55
  David Phinney, "OMB Backs Down. Now What? The Plan to Revise Competitive
Sourcing Expectations," Federal Times.com, Aug. 4, 2003.
                                         CRS-21

When a function is designated as inherently governmental, or is assigned reason code
A, a written justification is required. It is possible that this requirement could serve
as a deterrent to the reclassification of certain activities. Written justifications are not
required for commercial activities that are assigned reason code B, C, D, E, or F.56
The challenge and appeal process could result in the shifting of functions from one
list, or reason code, to another. For example, a challenge, and subsequent appeal,
filed by the American Federation of Government Employees (AFGE) resulted in the
Department of Commerce moving its seafood inspection function from the agency's
FAIR inventory to the inherently governmental activities list.57 It remains to be seen
how OMB and agencies might address differences, if any, that arise between
fluctuating agency inventories and OMB's estimate or expectation of the number of
commercial FTEs that are available for competition.

     OMB's September Report on Competitive Sourcing. In September,
OMB released a supplement to its July 2003 report. In the supplemental report,
OMB described agency competitive sourcing efforts, explained how agency progress
is measured, outlined benefits associated with the 2003 revision to the circular, and
explained additional initiatives necessary for achieving success in competitive
sourcing.58

    In the report's section on agency progress, OMB again addressed the issue of
competitive sourcing targets, and yellow plans and green plans:

     By eliminating government-wide goals, OMB hopes to dispel any
     misunderstanding or perception that competition should be applied in a one-size-
     fits-all manner to all agency commercial activities.... Focusing on the plans
     agencies have developed will reinforce the tailored approach to competition that
     is key for the successful use of competitive sourcing.

     No agency is planning to compete all of its commercial activities. However, an
     agency will be expected to lay out a reasonable plan (e.g., appropriately
     sequenced and timed) for competing the activities that, after considered analysis,
     it has concluded are suitable for competition. This plan will constitute the
     agency's "green" plan on the management scorecard used to measure agency
     progress and status on PMA initiatives. Agencies continue to have "yellow"
     plans that serve as an intermediate step to green....

     A few agencies have already achieved yellow status. All positions in the yellow
     plan need not have been competed in order to earn a yellow status. Nor must an
     agency have competed all positions in a green plan to receive a green status. In


56
  U.S. Office of Management and Budget, "Year 2003 Inventories of Commercial and
Inherently Governmental Activities."
57
  Amelia Gruber, "Union Pleased with Wins in 2002 FAIR Act Disputes," Government
Executive, Daily Briefing, Aug. 4, 2003, available at [http://www.govexec.com/dailyfed/
0803/080403a1.htm], visited Jan. 6, 2005.
58
    U.S. Office of Management and Budget, Competitive Sourcing: Reasoned and
Responsible Public-Private Competition, Agency Activities, Sept. 2003, available at
[http://www.whitehouse.gov/omb/procurement/comp_sourc_addendum.pdf], visited Jan. 5,
2005.
                                           CRS-22

        addition, there are no predetermined times for moving from red to yellow or
        yellow to green. Timeframes will be based on an agency's analysis of its mission
        and workforce mix and other factors.59

However, it is still not clear how a yellow competitive sourcing plan differs from a
green competitive sourcing plan. Restated, do agencies know, and understand, what
they must do to transform a yellow competition plan to a green plan?

     OMB's September report included two tables that provided information about
the 24 agencies and departments that it tracks. Table 3 shows how many FTEs in
each agency are eligible for public-private competitions. Column headings have been
modified slightly as an aid to understanding the information presented therein.




59
     Ibid., pp. 6-7.
                                                    CRS-23

  Table 3. OMB Estimates of Commercial Activities FTEs at Agencies and Departments Tracked under the PMA(a)

Agency or Department    Total FTEsb   Commercial FTEs    Commercial FTEs   Percentage of Total   Percentage of
                                                           Available for     FTEs That Are       Commercial FTEs
                                                           Competition        Commercial         That Are Available for
                                                                                                 Competition

Dept. of Agriculture      98,500           46,500            35,600               36%                    77%
Dept. of Commerce         26,500           8,400              4,800                18                     57

Dept. of Defense          596,600         410,700            270,600               45                     65

Dept. of Education         4,700           3,100              2,900                62                     94
Dept. of Energy           15,100           7,800              4,700                31                     60
Dept. of Health and       64,900           31,400            11,200                17                     36
Human Services
Dept. of Housing and
Urban Development          9,200           8,000              3,600                39                     45

Dept. of the Interior     70,200           33,900            23,000                33                     68
Dept. of Justice          132,100          10,600             3,400                3                      32
Dept. of Labor            16,400           6,200              2,600                16                     42
Dept. of State            10,400           2,300              1,000                10                     43
Dept. of                  64,600           38,400            11,900                18                     31
Transportation
Dept. of the Treasury     148,100          27,100            18,400                12                     68
                                                   CRS-24

Agency or Department   Total FTEsb   Commercial FTEs    Commercial FTEs   Percentage of Total   Percentage of
                                                          Available for     FTEs That Are       Commercial FTEs
                                                          Competition        Commercial         That Are Available for
                                                                                                Competition

Dept. of Veterans        221,500         190,500             7,600                3                       4
Affairsc
Environmental            17,400            600                400                 2                      67
Protection Agency
General Services         14,100           6,300              5,200                37                     83
Administration
National Aeronautics
and Space                19,000           7,400              3,400                18                     46
Administration

National Science          1,200            500                200                 17                     40
Foundation

Office of Personnel       3,000           1,700               600                 20                     35
Management
Small Business            4,200           3,000              2,900                69                     97
Administration
Smithsonian               4,500           1,300                0                  29                      0
Institution

Social Security          63,900          11,100              4,000                6                      36
Administration
U.S. Agency for
International             2,000            600                300                 15                     50
Development
                                                                                     CRS-25

 Agency or Department                 Total FTEsb               Commercial FTEs               Commercial FTEs               Percentage of Total         Percentage of
                                                                                                Available for                 FTEs That Are             Commercial FTEs
                                                                                                Competition                    Commercial               That Are Available for
                                                                                                                                                        Competition

 U.S. Army Corps of                      27,900                        23,300                        16,500                           59                            71
 Engineers (civil)d
 Total                                 1,636,000                      880,700                        434,800                          27                            49

Source: U.S. Office of Management and Budget, Competitive Sourcing: Reasoned and Responsible Public-Private Competition, Agency Activities, Sept. 2003, available at
[http://www.whitehouse.gov/omb/procurement/comp_sourc_addendum.pdf], visited Jan. 5, 2005, p. 10. The column on the right ("Percentage of Commercial FTEs That Are Available
for Competition") and the row of totals were added by the author.

Notes:
a. In its report, OMB stated that these figures are estimates based on initial 2002 inventories submitted to OMB. Because some agencies and departments submit separate inventories
        for their Offices of Inspector General (OIGs), these figures may not include OIG inventories. The Department of Homeland Security is not listed because it did not exist when
        the 2002 inventories were submitted to OMB. (U.S. Office of Management and Budget, Competitive Sourcing: Reasoned and Responsible Public-Private Competition, Agency
        Activities, p. 10.)
b. In the September report from OMB, there is no description or definition of what makes up the total FTEs. It is likely that this column includes inherently governmental FTEs and
 .
        commercial FTEs. A full-time equivalent (FTE) is "[t]he staffing of Federal civilian employee positions, expressed in terms of annual productive work hours (1,776 [hours])
        rather than annual available hours that includes non-productive hours (2,080 hours)." (U.S. Office of Management and Budget, Circular No. A-76 (Revised), p. D-5.)
c. The relatively small number of FTEs identified as commercial and available for competition probably is due to the fact that 38 U.S.C. 8110(a)(5) prohibits the Dept. of Veterans
        Affairs from using funds from three appropriation accounts (medical care, medical and prosthetic research, and medical administration and miscellaneous operating expenses)
        for public-private competitions. The Dept. of Veterans Affairs General Counsel issued a memorandum on April 28, 2003, affirming this prohibition. (Dept. of Veterans Affairs,
        General Counsel, Use of Health-Care Accounts and the Revolving Supply Fund to Conduct Competitive-Sourcing Studies of VHA Activities, Memorandum VAOPGCADV 7-2003,
        April 28, 2003.)
d. The Army Corps of Engineers provides services for both the public (for example, environmental management and restoration) and the military (for example, military engineering
        and construction). The use of the term "civil" in this table indicates the FTEs are associated with work that the Corps does for the public. See U.S. Army Corps of Engineers
        at [http://www.usace.army.mil], visited Jan. 6, 2005.
                                       CRS-26

     The aggregate figures presented by OMB in the September report are slightly
different from the numbers shown in the July report. The total number of FTEs was
1,609,000 in the July report; it was 1,636,000 in the September document. The
number of inherently governmental FTEs increased from 751,000 to 755,300.
However, the largest gain occurred among FTEs performing commercial activities.
In July, OMB reported there were 858,000 commercial FTEs, of which 416,000 were
available for competition. In September, the corresponding figures were 880,700 and
434,800. No explanation was provided for the discrepancy. However, OMB noted,
in both reports, that the figures were estimates. Thus, neither set of figures might be
accurate, and possibly the numbers could change again. The 2003 commercial
activities inventories, which have not been released to the public yet, could yield
figures that differ from what OMB has reported.

    The percentage of total FTEs that are commercial ranges from a low of 2%
(Environmental Protection Agency) to a high of 69% (Small Business
Administration). Twenty agencies identified at least 10% of their FTEs as
commercial.     Three agencies (Department of Education, Small Business
Administration, and U.S. Army Corps of Engineers (Civil)) indicated that at least
50% of their FTEs are performing commercial activities. The percentage for the total
number of commercial FTES (880,700) was 27%.

     Excluding the Smithsonian Institution, which does not have any commercial
activities available for competition, the percentage of commercial FTEs that are
available for competition ranges from 4% (Department of Veterans Affairs) to 97%
(Small Business Administration). Twelve agencies identified at least 50% of their
commercial activities as available for competition. Five additional agencies
classified 40% to 49% of their commercial activities as available for competition.
The aggregate percentage for this category is 49%, which is similar to the 2001 goal
of 50%.

      As it did in its July report, OMB described a rigorous process that agencies
follow in managing their competitive sourcing efforts, including the classification of
functions (as commercial or inherently governmental) and the assignment of reason
codes to commercial activities.60 If agencies' annual FAIR submissions are
modifications of the previous year's submissions, then it is possible that the initial
inventories, which were submitted in 1999, are the baseline. If this is the case, did
civilian agencies in 1999 have the capability, and a sufficient understanding of FAIR
and Circular A-76, to undertake a well-informed, thoughtful, strategic review of their
activities and the associated FTEs? Verifying that agency employees, and contractors
hired to assist in developing inventories, adhere to the process described by OMB
would be difficult. Agencies have not publicized the methodology or procedures
they use, including research and analysis, to develop their inventories (or their
competition plans).

     In its September report, OMB also presented profiles of agency competition
plans. The report does not explain whether there are any differences between a


60
  U.S. Office of Management and Budget, Competitive Sourcing: Reasoned and
Responsible Public-Private Competition, Agency Activities, Sept. 2003, pp. 2-5.
                                      CRS-27

profile and a plan. A profile includes the number of FTEs in an agency competition
plan, examples of commercial activities included in the competition plan, and
examples of commercial activities excluded from the competition plan. A
competition plan might include more detailed information, such as the number of
public-private competitions an agency plans to conduct, the location of competitions,
the number of FTEs associated with each competition, and a tentative competition
schedule.

     Table 4 displays the number of positions listed in each agency's competition
plan. It is unclear why one table in the OMB report uses the term "FTEs" while the
other table refers to "positions." To avoid misrepresenting OMB's information, the
following table uses both terms as OMB used them. Because one position does not
necessarily equal one FTE, the calculation of percentages might not be completely
accurate, but, at a minimum, the figures in the right column are indicative of the
percentage of commercial positions that are included in agency competition plans.
                                  CRS-28

  Table 4. Number of Positions in Agency Competition Plans

Agency or           Number of           Number of FTEs   Percentage of
Department          Positions in        Available for    Commercial
                    Competition Plana   Competitionb     Positions Included
                                                         in Competition
                                                         Plans
Dept. of                  5,822             35,600              16%
Agriculture
Dept. of                  1,203              4,800               25
Commerce
Dept. of Defense         67,800             270,600              25

Dept. of                  220                2,900               8
Education
Dept. of Energy           1,180              4,700               25
Dept. of Health
and Human                 2,510             11,200               22
Services
Dept. of Housing
and Urban                 870                3,600               24
Development
Dept. of the              3,041             23,000               13
Interior
Dept. of Justice          432                3,400               13
Dept. of Labor            420                2,600               16

Dept. of State            306                1,000               31

Dept. of                  3,029             11,900               25
Transportation
Dept. of the              4,523             18,400               25
Treasury
Dept. of Veterans        2,500c              7,600               33
Affairs
Environmental
Protection Agency         215                 400                54

General Services          734                5,200               14
Administration
National
Aeronautics and           921                3,400               27
Space
Administration
                                              CRS-29

 Agency or                 Number of                 Number of FTEs           Percentage of
 Department                Positions in              Available for            Commercial
                           Competition Plana         Competitionb             Positions Included
                                                                              in Competition
                                                                              Plans
 National Science           Plan under review                 200                 Not available
 Foundation
 Office of
 Personnel                          284                       600                        47
 Management
 Small Business             Plan under review                2,900                 Not available
 Administration
 Smithsonian                         0                         0                          0
 Institution
 Social Security                   1,691                     4,000                       42
 Administration
 U.S. Agency for            Plan under review                 300                  Not available
 International
 Development
 U.S. Army Corps
 of Engineers                      5,711                    16,500                       35
 (civil)d
 Total                           103,412                   434,800                       24

Source: U.S. Office of Management and Budget, Competitive Sourcing: Reasoned and Responsible
Public-Private Competition, Agency Activities, Sept. 2003, available at [http://www.whitehouse.gov/
omb/procurement/comp_sourc_addendum.pdf], visited Jan. 5, 2005, pp. 10-14. The column on the
right ("Percentage of Available Commercial Positions in Competition Plans") and the row of totals
were computed by the author.

Notes:
a. In its September report, OMB used the term "FTEs" in one table, "positions" in another. To avoid
       misrepresenting OMB's information, this table uses both terms as OMB used them.
b. A full-time equivalent (FTE) is "[t]he staffing of Federal civilian employee positions, expressed in
       terms of annual productive work hours (1,776 [hours]) rather than annual available hours that
       includes non-productive hours (2,080 hours)." (U.S. Office of Management and Budget,
       Circular No. A-76 (Revised), p. D-5.)
c. The relatively small number of positions included in the Dept. of Veterans Affairs' competition plan
       probably is due to the fact that 38 U.S.C. 8110(a)(5) prohibits the department from using funds
       from three appropriation accounts (medical care, medical and prosthetic research, and medical
       administration and miscellaneous operating expenses) for public-private competitions. The
       Dept. of Veterans Affairs General Counsel issued a memorandum on April 28, 2003 that
       affirmed this prohibition. (Dept. of Veterans Affairs, General Counsel, Use of Health-Care
       Accounts and the Revolving Supply Fund to Conduct Competitive-Sourcing Studies of VHA
       Activities, Memorandum VAOPGCADV 7-2003, April 28, 2003.)
d. The Army Corps of Engineers provides services for both the public (for example, environmental
       management and restoration) and the military (for example, military engineering and
       construction). The use of the term "civil" in this table indicates the FTEs are associated with
       work that the Corps does for the public. See U.S. Army Corps of Engineers at
       [http://www.usace.army.mil], visited Jan. 6, 2005.
                                          CRS-30

       From among the 21 agencies that have completed competition plans, 16 plan to
subject to competition at least 15% of the FTEs that are available for competition.
Three additional agencies plan to compete 13% or 14% of their commercial
activities. Excluding the Smithsonian Institution, which does not have any positions
in its competition plan, the lowest percentage is 8 (Department of Education) and the
highest percentage is 54 (Environmental Protection Agency).

     The OMB report does not explain whether the number of competitions per
agency includes new competitions (not yet started), ongoing competitions, or
completed competitions, or a combination thereof. Without a list of competitions
for each agency, there is no way to know the size of each competition (in terms of
number of FTEs), or the geographic locations and particular units or offices
(including type(s) of functions) under consideration for public-private competition.
Also missing is any guidance or policy on how often agencies will update their
competition plans and whether updates will be instigated by the agency, OMB, or
through consultation between the two.

     The percentage of available commercial positions in competition plans may
seem higher than expected, particularly in light of the elimination of the 15% and
50% targets. However, agencies possibly could have decided, despite the elimination
of these goals, not to change their competition plans. As reported in Government
Executive:

     It is ... not clear that OMB's move to scrap broad targets will result in fewer job
     competitions. It seems to have had little, if any, effect so far. After her [July 24,
     2003,] announcement, [Angela] Styles [then OFPP Administrator] went to a
     meeting of the President's Management Council, composed of the deputy
     secretaries of each Cabinet department. She told them that OMB was willing to
     renegotiate their initial competitive sourcing plans, designed when the White
     House was still prodding agencies to compete 15 percent of their jobs deemed
     "commercial" under the 1998 Federal Activities Inventory Reform (FAIR) Act.
     But few agencies took her up on the offer. "I haven't had that many [agencies]
     come back in to talk," she said. "I think the agencies are pretty comfortable with
     their plans."61

Possibly, federal government agencies have not taken advantage of the opportunity
to revisit their competition targets and plans.

    OMB Guidance on Green Competitive Sourcing Plans. In a
memorandum dated December 22, 2003, the Deputy Director for Management,
OMB, advised agencies on how to prepare a green competition plan.62 Developing
and implementing "a long-range competition plan [FY2004-FY2008] is a
fundamental standard for success in achieving a green rating" on the competitive


61
  Jason Peckenpaugh, "Weighing In on Job Competitions," Government Executive, Oct.
2003, p. 74.
62
  Clay Johnson III, Deputy Director for Management, U.S. Office of Management and
Budget, "Development of `Green' Plans for Competitive Sourcing," memorandum to the
President's Management Council, Dec. 22, 2003, available at [http://www.whitehouse.gov/
omb/procurement/index.html], visited Jan. 5, 2005.
                                             CRS-31

sourcing scorecard. A rationale offered by OMB for having (and implementing)
long-term plans is that the information contained therein will "ensure that
competitive sourcing is a carefully and regularly considered option for improving the
cost-effectiveness and quality of its [agency] commercial operations."63 The
memorandum does not include guidance on how to prepare a yellow competition
plan.

        A summary of the components, as required by the memorandum, is as follows:

        a. General decision making process. Explain the general process the agency uses
        to determine which commercial activities are competed.

        b. Activities to be announced for competition. Identify the activities that the
        agency is planning to announce for competition in FY2004 (or other period
        negotiated with OMB).

        c. Handling of other reason code "B" activities. For activities that are not
        identified in item ... b [above], but have been designated as reason code B on the
        2003 FAIR Act inventory, identify management's plan for taking timely and
        effective advantage of competition.

        d. Potential constraints. Identify the most significant factors (up to three) that
        limit the agency from giving greater consideration to competitive sourcing than
        is reflected in its plan. Also identify what the agency is doing to minimize these
        constraints and when it expects to have minimized the constraints.64

Additional, detailed guidance is provided in an attachment to the memorandum. No
deadline is provided for submission of initial agency competition plans. Updated
plans are to be completed by August 1 of each year, and if any changes have
occurred, agency management is expected to explain them. OMB's instructions do
allow for an agency to identify (a) functions and associated FTEs that will not be
subjected to competition by the end of FY2008 (the agency must provide a rationale
for any activities that are excluded from competition plans) and (b) functions, and
associated FTEs, that need further study in order to determine whether they should
be subjected to competition by the end of FY2008.65

     The notion of developing a long-term competition plan that includes all agency
functions with reason code B is consistent with OMB's July 2003 and September
2003 competitive sourcing reports. The criteria for long-term competition plans, as
described in the December 22, 2003, memorandum, allows agencies to determine
which functions and how many FTEs to compete each year (that is, an agency tailors
a plan to its particular needs and circumstances), encourages agencies to compete all
commercial functions that carry reason code B, and relies on agencies to develop
rationales for carrying out public-private competitions. These were significant
features of the reports issued by OMB in 2003. The requirement for all commercial


63
     Ibid., p. 1.
64
     Ibid., pp. 2-3 (italics in original).
65
     Ibid., Attachment A, p. 2.
                                      CRS-32

activities carrying reason code B to be included on long-term competition plans
appears to reinforce the expectation that all of these functions eventually will be
subjected to public-private competition.


                                 Conclusion
      OMB's approach to the establishment and application of competitive sourcing
goals has evolved since the inception of the Administration's competitive sourcing
initiative in 2001. Originally, the goals of 5% and 10% applied to each agency.
Later, the cumulative goal of 15% was characterized as a government-wide,
aggregate target. Meanwhile, Congress passed legislation directing OMB to provide
a rationale for competitive sourcing targets. In summer 2003, OMB announced
publicly that it had abandoned its numerical goals and that it had begun collaborating
with agencies on the development of their competition plans. At that time, OMB
also revised the scorecard criteria for competitive sourcing. Additionally, although
OMB dropped the long-term goal of 50%, it indicated that it expected agencies to
compete all functions identified as commercial and available. Guidance issued by
OMB on green competition plans suggests that agencies should plan to compete
most, if not all, eligible commercial activities. It remains to be seen how successful
various agencies will be in meeting the revised scorecard criteria and in meeting
OMB's expectation for competing all eligible functions.
                                                                CRS-33

                                                              Appendix A
                        Table 5. Executive Branch Management Scorecard: Competitive Sourcing Ratings

                                                     FY2002                            FY2003a                         FY2004
                                           June 30    Sept.    Dec. 31    Mar.   June 30    Sept.   Dec. 31    Mar.     June     Sept.
                                                       30                  31                30                 31       30       30
Dept. of Agriculture                      red        red       red       red     red       yellow   yellow    yellow   yellow   yellow
Dept. of Commerce                         red        red       red       red     red       yellow   yellow    yellow   yellow   yellow
Dept. of Defense                          red        red       red       red     yellow    yellow   yellow    yellow   green    green
Dept. of Education                        red        red       red       red     yellow    yellow   yellow    yellow   yellow   yellow
Dept. of Energy                           red        red       red       red     red       yellow   yellow    green    green    green
Dept. of Health and Human Services        red        red       red       red     red       yellow   yellow    green    green    green
Dept. of Homeland Security                red        red       red       red     red       red      yellow    yellow   yellow   yellow
Dept. of Housing and Urban Development    red        red       red       red     red       red      red       red      red      red
Dept. of the Interior                     red        red       red       red     red       yellow   yellow    yellow   yellow   yellow
Dept. of Justice                          red        red       red       red     red       yellow   yellow    yellow   yellow   yellow
Dept. of Labor                            red        red       red       red     red       red      red       red      yellow   yellow
Dept. of State                            red        red       red       red     red       red      red       red      red      state
Dept. of Transportation                   red        red       red       red     red       yellow   yellow    yellow   green    green
                                                                                    CRS-34

                                                                      FY2002                                     FY2003a                                   FY2004
                                                          June 30       Sept.      Dec. 31      Mar.       June 30       Sept.      Dec. 31      Mar.        June         Sept.
                                                                         30                      31                       30                      31          30           30
 Dept. of the Treasury                                    red         red         red          red         red         red         red         yellow       yellow       yellow
 Dept. of Veterans Affairs                                red         red         red          red         red         red         red         red          red          red
 Army Corps of Engineers                                  red         red         red          red         red         red         red         red          red          red
 General Services Administration                          red         red         red          red         red         yellow      yellow      yellow       yellow       green
 Environmental Protection Agency                          red         red         red          red         red         red         red         red          yellow       yellow
 National Aeronautics and Space                           red         red         red          red         red         red         yellow      yellow       yellow       yellow
 Administration

 National Science Foundation                              red         red         red          red         red         red         red         red          red          red
 Office of Management and Budget                          red         red         red          red         red         red         red         red          red          red
 Office of Personnel Management                           red         red         red          red         yellow      yellow      yellow      green        green        green
 Small Business Administration                            red         red         red          red         red         red         yellow      yellow       yellow       yellow
 Smithsonian                                              red         red         red          red         red         red         red         red          red          red
 Social Security Administration                           red         red         red          red         red         red         red         red          yellow       yellow
 U.S. Agency for International Development                red         red         red          red         red         red         red         red          red          red
Sources: President's Management Agenda Scorecards, available at [http://www.whitehouse.gov/results/agenda/scorecard.html], visited Jan. 5, 2005.
Note:
a. Comparisons between ratings received in FY2002 and subsequent fiscal years might not be valid since the criteria for green and yellow ratings were revised in 2003.

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