December 18, 2002
DRAFT
USDA, Forest Service
Competitive Sourcing Handbook
for
Business Case Analysis (BCA) and
Direct Conversion (DC) Studies
DRAFT Competitive Sourcing Handbook for
BCA and DC Studies
December 18, 2002
TABLE OF CONTENTS
INTRODUCTION………………………………………………………………………3
DIRECT CONVERSIONS……………………………………………………………...5
BUSINESS CASE ANALYSIS…………………………………………………………6
EXPRESS PROCESS……………………………………………………………………7
FOREST SERVICE SEVEN STEP PROCESS…………………………………………7
Step 1. Pre-Planning……………………………………………………………..8
Step 2. Announcing the Study………………………………………………….16
Step 3. Developing the PWS and QASP……………………………………….16
Step 4. Developing the In-House Cost Estimate……………………………….17
Step 5. Developing the Market Analysis (4 Comparable Contracts)………..…17
Step 6. Developing the Tentative and Final Decision………………………....18
Step 7. Implementation………………………………………………………...19
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INTRODUCTION
This USDA Forest Service Competitive Sourcing Handbook is intended to provide additional
guidance to enable Express, Business Case Analysis (formerly Streamlined), and direct
conversion A-76 studies to be completed within the desired timeframes. It is a mix of
recommended as well as Office of Management and Budget (OMB) guidance. The OMB
Circular A-76 takes precedence if this Guidebook conflicts with the Circular.
This handbook has been modified to reflect the new proposed A-76 guidance, and as a result
slightly differs from what was presented in the November 2002 Reno and Arlington training
sessions. It may need to be further modified once the Final A-76 Circular is issued and as we
gain practical experience.
This Guidebook organizes the A-76 study process into a series of required or recommended
actions and identifies milestones throughout the process. Each action and milestone
encompasses issues that must be resolved in a timely manner. To expedite the process, some
actions can be conducted simultaneously. However, a significant number of actions involving
procurement and contracting must be performed sequentially. To complete an A-76 study within
a reasonable timeframe requires a concentrated effort, dedicated resources, and proactive
leadership.
There are four approved types of competitive sourcing studies that the Forest Service will use
during FY 2003. These include the Standard Competition (also called Full Study), Business
Case Analysis (BCA) (previously called Streamlined), Express Reviews, and Direct
Conversions. USDA informed the Forest Service that the Express procedure may be used
through FY 2003, and will not be available afterwards. The standard A-76 competition is very
complex and will be completed with the assistance and oversight of the Competitive Sourcing
Washington Office and with consultant support. Guidance for the BSA and direct conversion
can be found in the new proposed OMB Circular A-76; however, we have expanded on this and
have provided additional guidance for the field activities to use. The USDA has issued guidance
on the Express Procedure.
Responsibilities. Below are the basic responsibilities of levels of the organization in regards to
Competitive Sourcing.
Washington Office (WO) Program Office. This office will communicate with the National
Leadership Team, develop strategies, provide guidance, make guidance interpretations, monitor
accomplishments, and interact with outside organization such as the USDA Competitive
Sourcing Office and OMB. It may lead Station-wide and WO studies.
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Competitive Sourcing Service Center. This office supports all full studies and assists the field
with their studies. It provides technical assistance to the agency and maintains all records of
competitive sourcing studies.
Region and Station Programs. Each Region and Station should identify a person to lead the
unit’s competitive sourcing program. This should be the primary responsibility of the Regional
contact.
Acquisition and Human Resources Offices. Each Acquisition and Human Resources should
have at least one individual trained in competitive sourcing.
Employee Involvement. Employees are a valuable asset and the best source for telling us how
to improve. Their involvement is critical to successfully completing the A-76 process. The
arenas that affected employees should participate include reengineering efforts, workload
determination, and functional and subject matter experts. Employees should feel that they could
play a role in deciding their ability to compete and have the full understanding that it is a
competition. Involvement on actual teams by affected management personnel and employees
should be scrutinized due to conflict of interest appearances and the loss of first right of refusal
entitlements that could be applied in the case of a contractor win.
It is important that all the study team members, the supervisors, and the line officers
communicate with employees and with their bargaining unit representative, if appropriate. When
possible, employees may be given the opportunity to assist with the study. For example, they
may assist with the Performance Work Statement (PWS) and Quality Assurance Surveillance
Plan (QASP) development, locate possible examples of comparable contracts, and provide
workload data.
Conflict of Interest. It is important to understand that during these studies any appearance of
bias toward the Government proposal is deemed an unfair advantage and can lead to appeals and
serious consequences such as overturning Government “wins” and award to private contracts.
The A-76 process is considered a procurement process whether the Government or private
industry wins. All of the regulations for procurement sensitivity must be maintained in order to
sustain the integrity of the study. The separation of the PWS and the Most Efficient
Organization (MEO) teams in a full study is mandatory and must be meticulously documented.
In BCA studies, the person preparing the Government costs should not be the same person
performing the market analysis on existing contracts.
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DIRECT CONVERSIONS
Direct Conversion is permitted when changing to or from an agency, private sector, or public
reimbursable source if a commercial activity meets any one of the following criteria:
1) Small Activity. An activity is or will be performed by an aggregate of 10 or fewer
civilian employees.
2) No Employee Impact. An activity is performed by civilian employees and: (a) all
directly affected Federal civilian employees with the agency are on permanent
appointments and are reassigned to comparable Federal Positions or voluntary retire;
or (b) agency Federal civilian employees are on time limited appointments.
3) R&D. An activity provides direct research and development (R&D) commercial
activities providing R&D support shall be subject to the Competition requirements of
the OMB Circular A-76.
4) Direct Patient Care. An activity provides direct patient care at Government-owned
hospitals. Other commercial activities performed at Government-owned hospitals
shall be subject to the requirements of the OMB Circular A-76.
5) Military. An activity is performed by military personnel.
6) National Defense and Security. An activity is necessary for National Defense or
Intelligence Security. The Secretary of the agency, with the prior written concurrence
of the Deputy Director for Management, OMB, shall authorize this type of direct
conversion.
7) Javits-Wagner-O’Day. An activity may be converted to a source administered
pursuant to Section 2 of the Javits-Wagner-O’ Day Act (41 U.S.C 44, 46-48)
8) Competition Waiver. An activity for which a Competition Waiver has been
approved.
9) Business Case Analysis. An activity for which a BCA has been performed.
10) Law. An activity where direct conversion is permitted by law.
Direct Conversions should only be used when it is to the agency’s advantage to use them.
The agency will use the OMB Circular A-76 as guidance to make direct conversion decisions.
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BUSINESS CASE ANALYSIS (BCA)
BCA is best used to study activities performed by a limited number of employees and the agency
believes that the current (As Is) unit is both efficiently and effectively organized. This
streamlined approach does not incorporate MEO development or a solicitation, and should be
conducted in a matter of weeks. It is acceptable to reengineer, conduct a business process
analysis, or reorganize to improve efficiency prior to the beginning of the BCA.
BCA studies must make a written certification that the activity being analyzed meets the
following criteria:
1)
2)
3)
4)
The activity is or will be performed in aggregate by 50 or fewer agency civilians;
The activity is commonly provided by the private sector to the Federal government by
contracts of comparable, size, workload and scope;
The activity has no more than $5,000 in asset purchase requirements and will be
predominately Government furnished/contractor operated;
5) The business case can be made on a limited analysis of labor cost, material cost, and
level of performance;
6) The time-frame from the certification to conduct a Business Case Analysis to
completion of the business case analysis does not exceed fifteen working days;
7) The cost of converting the activity to another source is fair and reasonable;
8) The activity has not been reorganized or restructured for the sole purpose performing
a Direct Conversion to avoid the Standard Competition requirements of the OMB
Circular A-76;
9) An MEO was not created for consideration in a Business Case Analysis for
conversion from agency performance to private sector or public reimbursable
performance; and
10) Market surveys were not used in lieu of actual contracts.
Note: If it is clear to management that a BCA will result in a outsource decision; management
should use direct conversion rather than BCA.
To perform a BCA, the designated CS study team shall (1) provide the Contracting Officer (CO)
a description of the workload and (2) develop a management plan. An MEO shall not be
developed when considering conversion from agency performance to a private sector source or
public reimbursable source (the BCA shall be based upon agency’s current organization, costs,
performance and structure).
Agency Cost Estimate will then be calculated and submitted the CO in a sealed package.
Upon submission of the sealed package, the CO shall: (1) identify four comparable, existing,
fixed price, Federal contracts of similar size, workload and scope but shall not issue a solicitation
at this point in the process. Existing public reimbursable agreements may be used but all costs
shall be adjusted to reflect he total cost to the taxpayer in accordance with the costing
requirements of the OMB Circular A-76). The CO then must determine that selected contracts
are reasonably grouped; (3) select the low contract price; and (4) open the management plan,
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complete, and sign the Standard Competition Form. If the CO determines that the selected
contracts (or ISSAs) cannot not be reasonably grouped or if four comparable contracts (or
ISSAs) are not available to perform a Direct Conversion, the agency shall perform a Standard
Competition in accordance with the Circular A-76.
EXPRESS PROCESS
The Express Process is similar to the Business Case Analysis (BCA), but there are several key
differences.




Express procedures can only be used for studies of 10 or fewer FTEs.
Express should use contracts to base market costs, but if these are unavailable, this
procedure can also compute costs using schedules, such as GSA schedules, or request
estimates from vendors.
There is no requirement to complete the Express study in 15 working days.
With Express, the agency must convert to an outside source only when the agency cost
exceeds the most expensive option. When the agency cost is less than the most expensive
option, it is management’s discretion whether to outsource the work. With BCA, the
agency cost is compared to the least expensive contract.
Use the USDA Guidance on Express Procedure as guidance. In addition, please follow the
Seven Step Process described below.
FOREST SERVICE SEVEN STEP PROCESS
The following are the steps for a Business Case Analysis or an Express Study. The seven steps
are required, but units can modify some of the recommendations within each step. Stay
consistent with OMB Circular A-76 and check with the Competitive Sourcing Service Center for
their opinion on whether your modifications appear consistent with Circular A-76 and FS
guidance. In regards to an Express study, stay consistent with the Circular A-76, the USDA
Guidance on Express procedures, and any FS Guidance.
The seven steps are:
1. Pre-planning.
2. Announcing the Study
3. Developing the PWS and QASP
4. Developing the In-house cost estimate
5. Developing the Market Analysis (4 comparable contracts)
6. Announcing the Tentative and Final decisions
7. Implementation
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Step 1. Pre-planning.
The pre-planning step may take some time. The major items to accomplish are:
a) Assign role responsibilities (lead, CO, TRO, HRA, and ATO)
b) Develop proposed timetable and strategy
c). Ensure proper resources to complete the study
d) Defining the business unit.
e) Collateral duties
f) Ensuring that the unit is efficiently and effectively organized.
g) Personnel management
The following is our recommendation in regards to each of these requirements:
a) Assign role responsibilities.
Anyone can propose role assignments, but ultimately these assignments should be reviewed by
the TRO, and approved by the ATO.
Before the cost comparison begins, team members should be identified. At a minimum, the
following responsibilities must be identified:





Study Lead (SL)
Contracting Officer (CO)
Technical Reviewing Official (TRO)
HR Advisor (HRA)
Agency Tender Official (ATO)
Study Lead. A SL is assigned to conduct and oversee the study. The SL is assigned all
responsibilities associated with the completion of all study activities: ensuring adequate
documentation of requirements, performing cost analysis, developing timelines, etc. The SL
should possess analytical skills and be organizationally positioned so that he/she can conduct the
study without strong bias or influence. The person or team conducting the study should not be in
the immediate chain of command for the activity being studied (i.e. the first line supervisor).
Additional team members (i.e., representatives from the functional organization, human
resources, contracting office, legal, etc.) are assigned to assist the SL, as needed. The SL could
also be the TRO and/or the HR Advisor.
This person should understand the work and is typically from the same organizational level that
is being studied. This person cannot be in the unit being studied, or the supervisor of that unit.
Example: Forest-Wide study of Building Maintenance - the SL could be a GS-11 civil engineer
(but not the forest engineer) from the forest
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SL Responsibilities:
 Ensuring That the Study Is Completed on Schedule
 Clarifying the Positions in the Business Unit
 Determining the Percentage of Time These Positions Provide the Service
 Identifying Additional Costs
 Developing the Performance Work Statement (PWS)
 Developing the Quality Assurance Surveillance Plan (QASP)
 Identifying Possible Vendors and Obtaining Existing Contracts for Comparison
Contracting Officer (CO). This person should be an inherently governmental contracting official.
Contracting Officer Responsibilities:
 Ensuring any FedBizOps notifications.
 Reviewing the PWS and QASP
 Developing the Market Analyses (4 comparative contracts)
 Award contract if decision goes to contractor
Technical Reviewing Official (TRO): The TRO must be experienced in Competitive Sourcing
and could handle several studies concurrently. This person is typically not in the unit under
study. For example, the TRO could be the Regional Competitive Sourcing lead, a specialist in
the RO acquisition staff, or a detailer operating from a virtual location.
Technical Reviewing Official Responsibilities:
 Providing Advice and Assistance to managers, employees, and study members.
 Ensuring Proper Business Unit Determination (Packaging)
 Reviewing the Quality of the Data and Making Adjustments If Needed
 Reviewing the In-House Cost estimate.
 Finalizing a Draft of the Study to Submit to the Agency Tender Official
Note: Conflict of Interest Caution. The Reviewer responsible for the government costs must
not be the same reviewer preparing the market analysis.
Agency Tender Official (ATO): This is an inherently governmental agency official with
decision-making authority. This will be an SES position that generally is one organizational
level above the studied “Business Unit”. Example: This could be the Regional Forester for a
Region-wide, Forest-wide or smaller study. It may be both SESers for studies involving two
units (e.g. R-6 and PNW) or a Deputy Chief. The ATO may not serve in any other role
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Agency Tender Official Responsibilities:
 Ensuring the Study Is Fair and Accurate
 Ensuring Sufficient Resources to Accomplish the Studies on Schedule
 Approving the key officials (lead, CO, TRO, and HRA)
 Acting as the Decision Authority for Questions Pertaining to Definition of the
Business Units
 Certifying the In-house Cost Estimate
 Making Both the Tentative and Final Decisions
Human Resources Advisor (HRA): This will be human resources specialist who is
knowledgeable of competitive sourcing procedures and requirements. The HRA could also serve
as SL or TRO, but not both.
HRA Responsibilities:
 Give HR advice to management, employees, and team members concerning any HR
implications of the study.
 Ensure that unit is efficiently organized and staffed prior to the beginning of the
study.
 Determine the positions included in the study.
 Ensure that bargaining unit obligations are met, if appropriate.
 If needed, lead any outplacement efforts.
Example of role assignments. An example of these roles with a Forest-wide roads and grounds
maintenance study could be a GS-11 engineer assigned the SL, the Forest personnelist the HRA,
Forest Contracting specialist the CO, the Regional Competitive Sourcing lead the TRO, and
Regional Forester the ATO.
SL
Determining Business Unit
Definition
Identifying resources
Announcing the Study
Identifying positions in the Unit
Developing PWS
Developing In-House Cost Estimate
Developing Market Analysis
Developing Tentative Decision
Approve Tentative and Final
Decision
CO
X
X
HRA
TRO
X
X
X
ATO
X
X
X
X
X
X
X
X
X
X
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b) Develop proposed timetable and strategy.
Anyone can propose the study plan including the supervisor of the business unit. This plan
should include the timetable, strategy, and names of participants. Ultimately, this study plan
should be reviewed by the Technical Reviewing Official, Competitive Sourcing Service Center,
and approved by the Agency Tender Official. We recommend that the SL develop the draft
study plan.
c) Ensure proper resources to complete the study.
The SL, TRO, and the ATO should all ensure that the proper financial and personnel resources
are available to complete the study within the proposed timeframe.
d) Defining Business Units (Packaging of the Study)
Determination of what activities and functions are included in a study is critical. This includes
identifying the core elements of the organization under study, and those associated groups that
support and interact with the core function under study. Examples of business units could be: all
building maintenance on a National Forest; all building and road maintenance on a National
Forest; or all building maintenance across three National Forests.
Anyone can draft this definition, but it normally is the responsibility of the SL and HR Advisor.
The supervisor and employees in the unit can assist. The definition of the Business Unit must be
reviewed by the TRO, Competitive Sourcing Service Center, and ATO.
The FAIR Act Inventory is used as a starting point to identify functions. Realizing that this
inventory is not 100% accurate, inventory coding should not be used as the only factor for
including a function in a study. For example, if no building maintenance FTEs were identified as
such in the inventory, but employees are actually performing this function, then these building
maintenance functions should be studied.
Defining the units and establishing the boundaries for “packaging” the function or business unit
is extremely important in establishing how work will be done. Boundaries should be established
in such a way that the product or service produced by the activity is adequately maintained,
regardless of who wins the competition.
Once boundaries are defined, consideration must be given to functions within the business unit
that are inherently governmental or any that are outside of the scope (i.e. part of another
organization or agency). Inherently governmental activities and activities outside the scope
should be excluded from the business unit to be studied.
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The following considerations will be used in determining business units:

Ensure that the size of the business unit is not too small.
- It may be impractical to spend the time and expense to study a business unit that
costs the agency under $100,000 annually. Consider combining functions in Forests
for maximum efficiency.

Define business units that will likely obtain vendor proposals as well as make it likely
that comparable examples can be found.
- For example, do not package building maintenance with clerical support. Locating
comparable contracts would be unlikely.

Do not define business units to give the agency or a vendor an advantage.
- For example, with a facilities maintenance study do not add receptionist duties
because we believe few vendors would be interested in providing both maintenance
and receptionist responsibilities or because we know that our receptionist costs are
very low and we wish to use this low cost to assist with showing a low building
maintenance cost. Do not attempt to minimize the number of vendors or help make
the government appear more efficient, or visa versa. The agency must conduct a fair
and equitable study and determine where best to obtain the service.

Avoid including different tasks at different locations.
- For example, with facilities maintenance, avoid including plumbing at some
locations and not at others. It doesn’t matter that we already contract plumbing at a
district. Include plumbing in the entire package and include the contract costs for the
district where plumbing is already contracted in determining the government cost.

Never define business units for the purpose of keeping within the 50 FTE BCA:
- For example, do not separate a road maintenance study into two separate studies for
the purpose of getting the studies under 50 FTEs. This is forbidden by A-76 rules.

Do not define business units solely based on existing people and structure.
- For example, if we were reviewing timber marking and a Forest has two timber
marking crews, do not develop two separate business units for study.
e) Collateral duties. (Note: this section is still being worked on)
Due to the small size of most Forest Service units and the need to respond to emergencies, e.g.
fires, our agency often assigns many collateral duties. An integral part of establishing the
Government bid is to accurately define the workload in a particular function. The total functions
that a fulltime employee performs constitute one year of effort. These functions must be
analyzed, separated, and then categorized in an A-76 study. Generally speaking, if one function
is being studied, but a person spends an estimated 25 percent of their time on a collateral duty
unrelated to their main job, only 75 percent of that person’s time should be used in the analyses
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on their main job. Only the portion of time that an employee performs the function under study
will be counted.
For example: Employee #1 performs road maintenance functions 65% of the time, fire duties
30% of the time and fills in for the office secretary 5% of the time. Employee #2 performs road
maintenance functions 60% of the time, and fire duties 40% of the time. Since we are studying
the road maintenance function, 65% of employee #1 and 60% of employee #2 is calculated
toward the PWS, or 1.25 FTEs in this example.
The agency has the option of studying both activities together, but we believe that this should be
the exception rather than the rule. In most cases, combining unrelated activities would cause too
much complexity and lead to possible protests. For example, it would be inappropriate to study
Human Resources and Fire in the same study. It would appear that the agency is combining
activities to limit the outside competition.
Combining something like trail maintenance and a collateral duty such as fire suppression into a
single study may be appropriate only when both trail maintenance and fire suppression activities
are being studied. That is, people who do these activities as their main jobs are also being
studied.
This leads to the question, what happens if a study recommends outsourcing an activity that
supports another work activity? For example, if trails maintenance is outsourced, who will be
trained to suppress fires? (Note: this issue is being analyzed and further guidance will be
issued.)
f) Ensuring that the unit is efficiently and effectively organized.
Business Process Reengineering (BPR) or simply abolishing excess or vacant positions is a very
important tool that should be considered prior to a BCA. The definition of reengineering is
radical redesign and rethinking of how to accomplish work. It is an opportunity to improve
processes and adjust personnel to allow employees to become more competitive prior to
announcement of an official A-76 BCA. However, even just abolishing excess or vacant
positions will help improve competitiveness. It is an opportunity to improve processes and
adjust personnel to allow employees to become more competitive prior to announcement of an
official A-76 BCA. Adjustments that can lead to our workforce in becoming more competitive
are worth pursuing and are encouraged to the extent possible in a limited timeframe.
We will use two definitions for clarity:
Initial organization. This is the organization prior to any modifications. In theory, it
should be the organization defined in the FAIR Inventory, but it does not need to be.
You will need to document this organization so cost savings can be calculated.
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“As Is” or Business Unit. This is the organization that is being studied. In theory, it is
the agency’s “most efficient organization”, but be aware that in theory an MEO is not
developed with a BCA or Express. The cost of the “business unit” will be calculated by
the study.
Initial organization. Please document the initial organization. You will need to compute the cost
of the initial organization and Business Unit in both an Express and BCA study.
“As is” or Business Unit. The initial organization should be reengineered to become more
efficient, the results of which are the “as is” organization. The cost of the “as is” organization is
then compared to the cost of other potential bidders.
Any major reengineering or restructuring still requires all appropriate FS requirements (e.g. Civil
Rights Impact Analysis) and approvals prior to the beginning of the study. Minor adjustments,
like abolishing individual positions, may be immediately made in many cases. If reorganization
has been approved, but not all surplus employees have been placed, the study can proceed
assuming that the surplus position has already been abolished.
The HRA should ensure that reengineering is considered and implemented prior to the study. A
narrative description of the business unit should be contained in the final report. The HRA
should document the name, series, grade of each employee in the “initial organization” and the
“As is” business unit should be listed on separate spreadsheets. A blank spreadsheet is available
on the web site.
Prior to the beginning of a BCA, management should review the organization to be studied to
determine if there are any reasonable adjustments or reengineering that should occur prior to the
study to make the organization more competitive. Review should include input from employees
and their Union representatives. Resulting actions could be actions such as abolishing vacant
positions, adjusting overhead and supervisory structures, business process reengineering (BPR),
or readjusting work assignments.
The supervisor of the unit and the ATO should be comfortable that the business unit is
performing their responsibilities at an acceptable level of performance. Generally speaking, if
the activity stays in-house, the business will need to perform at an acceptable level of
performance or be outsourced.
Once the study officially begins, the agency cannot reorganize or make other adjustments to
work processes to become more efficient. If the in-house organization wins the competition, the
unit must maintain the organization for at least 24 months. If the unit needs additional staff or
support to maintain adequate performance, the express or BCA must be revisited based on the
new organization and it may have to be re-competed.
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Reengineering efforts are not limited to the FY 2003 studies. All units should consider utilizing
this process sooner rather than later in order to maximize the ability to become more efficient
before competition. These reengineering efforts must be put in place immediately and will then
become the new As-Is Organization that the streamline study will then do a cost comparison on.
Also sharing of Best Practices is an integral part of reengineering in an organization. In many
cased there are one or more units that have developed processes and procedures over time that
could be perceived as a better way to do business. These units are asked to share their
information to help other units to develop or adopt these efficiencies. It is the intent of the WO
to develop a Best Practices web site that allows units to post these “Best Practices” for widest
dissemination. Prior to the establishment of the web site, we encourage sharing this information
with other units through existing networks and relationships.
g) Personnel management. (Note: this section is still being worked on)
In conjunction with or prior to the announcement of a study, management should implement a
plan to minimize the likelihood of a reduction in force. This should include an employment
freeze that may be directed nationally or could be implemented only for the unit being studied.
Once a study has officially begun, the unit rarely should fill vacant positions within the functions
being studied with permanent or term appointments. The procedure for exceptions to the freeze
should be clarified in the announcement.
Any job advertisements must point out that the position is under a competitive sourcing study
and the agency must document that they notified any employee who is reassigned into a position
under study (or similar personnel action, e.g. transfer, etc.). Positions may typically be filled
with temporary, other non-permanent, or contract employees. Units could convert students from
the Student Career Employment Program (SCEP). Once an in-house win is tentative announced,
the freeze should be lifted to allow the unit to begin filling vacancies, if applicable, but selected
employees should still be notified that the decision is not yet final.
Post-study adjustments in personnel, whether resulting from loosing the competition through
outsourcing or through reengineering, can be done by using the existing processes, such as
WRAPS. Additional personnel adjustment mechanisms, such as reduction in force and targeted
buyouts are being investigated.
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Step 2. Announcing the Study
A formal announcement letter will be sent to employees, affected bargaining units, and to the
private sector announcing the official start of studies. This letter will be coordinated by the
Competitive Sourcing Service Center office and can be signed by the ATO. A sample
announcement letter can be found on the CS website
http://fsweb.wo.fs.fed.us/pma/main/CS.shtml. The CO is responsible for drafting and
coordinating the official announcement in FedBizOps. The letter will be annotated with the
official start date of the study. And once a decision is made for a study to either remain in-house
or to be contracted out, the CO shall announce the decision or delegate that announcement
responsibility to another official.
Note: Formal announcements should be done after any reengineering efforts have been
implemented.
Step 3. Developing the Performance Work Statement (PWS) and Quality Assurance
Surveillance Plan (QASP) Development
We recommend that the SL, with assistance from the CO, develop the PWS and QASP. The
supervisor of the business unit and studied employees can provide assistance.
The accurate and comprehensive development of the PWS is critical. This document must
describe the work to be performed including results or outcomes. This must be written in such a
way that accurate and valid market research can be accomplished.
The PWS is the key to accurate costing and workload projections for both the Government bid
and market research. Standards and regulations that must be maintained are incorporated into this
document in order to minimize the possibility of low bidders.
The first step in the process is to gather the minimum amount of product and/or service workload
requirements for use in identifying existing or recently expired contracts/ISSAs with similar
requirements. Minor modifications are then made to PWS of the one that most closely reflects
the work to be accomplished. The intent is to avoid development of a new or original
Performance Work Statement if one already exists. If there are no existing or recently expired
contracts or ISSAs, the SL will use the data gathered to assist in the development of a
Performance Work Statement (PWS) and Quality Assurance Surveillance Plan (QASP). Sample
PWSs are on the FS Competitive Sourcing website http://fsweb.wo.fs.fed.us/pma/main/CS.shtml.
PWSs and QASPs should be outcome-based, clear, quantifiable, and measurable. Generally
speaking, the PWS should describe “what” needs to be done, not “how”. Examples of data
include information on the current organization, its mission, and function(s) being studied;
identification of available historical workload and indicators of future workload requirements;
current staffing levels, facilities and equipment; work measures and standards; and the customer
base.
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A major part of the PWS is to determine workload. It is important to identify “how much” of
each PWS activity is performed and this data must be accurate. A standard study typically
collects two years of past workload data. With BCA and Express, workload can be estimated,
but collecting actual workload data is recommended. Be sure to document how the workload
was determined and the rationale for any workload estimate.
Note: The proposed A-76 guidance recommends eliminating the Independent Review (IR) and
the Independent Reviewing Official (IRO). A unit would need to include this step and identify
this official if conducting a Streamlined Analysis using the old rules. Assuming that the IR is
eliminated when the new rules are published, this step is optional. The IRO is a management
official, higher than the supervisor of the business unit, but not directly in the chain of command.
The IRO should understand the work under study. The main responsibility is to certify that the
PWS and QASP identify all necessary work and these documents accurately describe the
workload and level of performance. For maintenance study the IRO could be a Deputy Forest
Supervisor, Administrative Officer, or staff officer that is not in the chain of command of the
maintenance business unit.
Step 4. Developing the In-house Agency Cost Estimate.
The SL generally develops this, but assistance or review by others is encouraged including the
supervisor and employees in the business unit. The CO cannot have any knowledge of this
estimate. Use the OMB Circular A-76 for guidance on how to compute this cost. We
recommend using WinCOMPARE2 software to assist with this analysis. This software can be
found on the CS webpage http://fsweb.wo.fs.fed.us/pma/main/CS.shtml.
This estimate should be reviewed and edited if appropriate by the Technical Reviewing Official,
reviewed by the Competitive Sourcing Service Center, and approved by the ATO. After it is
approved, it should be sealed. The Technical Reviewing Official should maintain the sealed
original copy and a sealed copy should be mailed to the Competitive Sourcing Service Center.
Step 5. Developing the Market Analyses (4 Comparable Contracts).
The CO must develop the Market Analysis. The CO may assemble what appear to be
comparable studies, but can’t work on the actual review, selection, and adjustments until after
the In-house Agency Cost Estimate is sealed. If the CO learns the amount of this estimate,
another CO should be assigned to the study.
Others may also recommend possible comparable studies to the CO. This includes the SL,
supervisor of the business unit, and employees under study.
Use the OMB Circular A-76 for guidance on how to compute the comparable cost. Generally
speaking, the 4 representative contracts should be the most similar to the PWS requirements. For
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DRAFT Competitive Sourcing Handbook for
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example, FS contracts for similar work on the same unit are best, contracts from another Forest
may be next best, contracts from the Park Service may be next in priority, and contracts from the
military next in priority. That is, if we have 4 contracts from the same Forest, use them. Do not
use cost as a selection factor. Do not locate a large number of studies across many units and use
lowest cost as the selective factor.
Adjustments for size of the contract, geographical location, etc. are permitted, but the rationale
must be documented.
The review of the comparable market analysis must follow this order. The CO must submit it to
the Technical Reviewing Official for review. Adjustments can be made, but these adjustments
and rationale must be documented. The next step begins immediately after the TSO concurs on
the Market Analysis.
Step 6. Developing the Tentative and Final Decisions.
Once the market review is complete, the TRO must create the Tentative Study Report. This
report announces the tentative decision and includes as enclosures: the Plan, PWS, QASP, Inhouse Cost Estimate, and Market Analysis.
The ATO must approve the Tentative Study Report. Any adjustments to calculations and the
rationale in the In-house Cost Estimate or Market Analysis must be documented.
After coordination with the WO Competitive Sourcing Office or CS Service Center, the
Tentative Decision may be announced by the ATO or line officer for the unit being studied (e.g.
Forest Supervisor for a study on a Forest.)
The copy of the Study Report must be mailed to the CS Service Center and to any individual
who requests it.
Use the OMB Circular A-76 to decide on the appropriate comment period. The CS Service
Center should receive any appeals or comments concerning the tentative decision, and determine
the appropriate Administrative Appeal official and review process, and coordinate corrective
actions if needed.
The ATO or Deputy Chief for Business Operations, if appropriate, must approve the Final Study
Report. The Final Decision may be announced by the Deputy Chief for Business Operations,
ATO, or line officer for the unit being studied.
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DRAFT Competitive Sourcing Handbook for
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Step 7. Implementation.
a)
Decision.
Decision recommends agency performance. If the tentative decision supports continued agency
performance, typically any employment freeze should be lifted. However, employees selected to
fill vacancies must be notified that the decision is still “tentative.”
After the decision is final, there is no longer a requirement to notify employees selected for
positions in the business unit.
One year after the final decision, the ATO should ensure that the business unit is meeting the
PWS and QASP. If not, they should be given notice to improve. If they cannot, the Approving
Officer should work with the CS Service Center to discuss what adjustments are possible. If the
business unit still cannot meet the PWS or QASP, the work should be contracted.
Decision recommends outsourcing. If the Tentative Decision recommends contracting the work,
the HR Advisor should immediately begin efforts to place impacted employees.
The Contracting Officer should use the PWS and QASP and immediately issue a solicitation.
b)
Personnel adjustments. (Note: this section is still being worked on)
Post-study adjustments in personnel, whether resulting from loosing the competition through
outsourcing or through reengineering, can be done by using the existing processes, such as
WRAPS. Additional personnel adjustment mechanisms, such as reduction in force and targeted
buyouts are being investigated.
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