Unsafe fire engines and chronically backlogged repairs were not likely what the federal government had in mind when it outsourced all the maintenance of California’s Forest Service vehicles in 2005.
Nonetheless, that’s just what it got when it handed the jobs of 80 government employees over to Britain’s Serco Management Services, which the agency called at the time “a leading international outsourcing company.”
The contract, undertaken in accordance with President George W. Bush’s competitive sourcing initiative, handed over to Serco the repair, maintenance and inspection duties for all vehicles used in California’s 18 national forests; it was billed as an estimated savings of $1.7 million in fiscal year 2005. But numerous brake failures, inadequate annual inspections and a ballooning backlog of work began plaguing the agency within weeks of the company’s February 2005 start date. In one case, an accident investigation discovered failed brakes on a fire engine though it had been twice repaired by Serco mechanics, according to the Forest Service. In another example, government inspectors “red tagged” 14 out of 25 fire engines for critical safety issues just after Serco’s annual service checkups.
In April 2006, the Forest Service issued a warning to the company, citing a “significant and growing decline in Serco’s performance.” And after Serco’s response, which called the agency’s performance standards “impossible to meet,” the Forest Service cancelled the contract altogether in May.
This California fiasco may read like a significant cautionary tale of outsourcing gone bad, but to hear it from Forest Service representatives in Washington, D.C., the contract default is little more than par for the course. “It’s very common in the contracting world that that happens,” says Jacqueline Myers, the agency’s associate deputy chief for business operations. “That work is still contracted out today under a new contract, so it’s not really a big deal.”
California’s ongoing example is just one piece of a much larger phenomenon. Bush’s marching orders require every federal agency to increase its competitive sourcing efforts, and as the Forest Service works fast and furiously to keep up, many of those affected in Montana are starting to wonder just where those orders are taking the agency.
The Forest Service has long been regarded as a behemoth glacier of a federal agency, where change comes slowly, over generations, if at all. It’s more than a little ironic, then, that in this age of rapidly diminishing glaciers—government scientists say Glacier National Park’s namesakes will be gone by 2030—massive change is sweeping quickly through the Forest Service, too.
In response to Bush’s management agenda, the agency has recently developed and begun implementing the “Green Plan,” a strategy that calls for systematic consideration of outsourcing more than 75 percent of Forest Service jobs nationwide. Jobs in everything from fire fighting to communications, from scientific data collection to engineering, and on down the line are on the block. The Green Plan, which national officials say is still in draft form and hasn’t officially been released, even though implementation has begun, represents an aggressive next step for an agency that has in recent years begun attempting to transform from its traditional, decentralized format into a lean, mean forest-managing machine. Gone are the days of rangers who handle everything in their necks of the woods, a method the Green Plan sterilely calls “job fragmentation,” with the critique that “although positions with multiple duties have provided extreme workforce flexibility and have served as an organizational strength, it can be perceived as inefficient, and adds extreme complexity to…competitive sourcing studies.” Welcome to the modern era, where public lands management is being molded to fit the private-sector cast.
The stated goal in the president’s management agenda is to increase efficiency and decrease budgets in light of skyrocketing federal deficits and expenses. And nobody is arguing that improved savings and efficiency aren’t worthwhile goals. What is shaping up as the major debate, though, is whether outsourcing will prove to be an effective money-saving strategy for the Forest Service, and at what cost.
Employee unions, and some of the agency’s own data, call into question just what might be accomplished by a massive reorganization with hypothetical consequences. Critics say that though downsized and centralized operations will obviously produce payroll savings, there are many accompanying costs to be factored: Millions of dollars are being taken off the top of the Forest Service’s already-stretched budget to fund the planning, research, management and monitoring of competitive sourcing studies and implement their results; thousands of staff are being diverted from their duties to devote their attention to executing the changes; and even employees and offices apparently unaffected by competitive sourcing must absorb leftover workloads. Furthermore, they note, the Forest Service’s outsourcing program hasn’t been around long enough to develop a track record that demonstrates whether the changes are effective over the long term, and what impact they may have on the agency’s overall infrastructure and ability to respond to critical needs like wildfire fighting. For every savings the Forest Service cites, people like Bill Dougan, president of the Forest Service Council of the National Federation of Federal Employees (NFFE), can point to less obvious and uncounted costs.
“All we’ve done is spent a bunch of money changing these organizations,” Dougan says. “All we’re seeing is a bunch of costs with nothing to show for it.”
Dougan and others worry that Bush’s predilection for privatization—also exhibited in recent bids to sell off federal land and privatize Social Security—is transforming the Forest Service without any empirical evidence that such changes make sense.
The message coming from the national offices of the Forest Service is that the Green Plan is no big deal. Myers, the Forest Service’s competitive sourcing authority, says the agency’s leaders are doing what “any prudent manager does on an annual basis.”
But as unions and other agency watchdogs continue to look closely at the Forest Service’s competitive sourcing efforts, Congress has picked up on some of their questions and is now seeking independent assurance—in the form of an audit to be performed by the Governmental Accountability Office (GAO)—that the agency’s comprehensive outsourcing program can accomplish its goals.
As Ron Thatcher sees it, he isn’t just fighting for his job. The Libby engineer, who’s worked for the Forest Service 27 years, says he’s fighting for his community, much of which is tied into the resource management agency now that the lumber mills and mines have shut down. He’s also convinced that the trend he’s seen spread like wildfire through the Forest Service during President Bush’s tenure is quietly abolishing the human infrastructure necessary to manage the nation’s forests. Worst of all, he says, it’s all happening in the name of unproven savings.
Some in Washington, D.C., are asking the same questions as Thatcher and the unions. In February, Montana Sen. Conrad Burns signed onto a letter requesting a GAO audit—now scheduled to begin this summer—that will evaluate the costs of Forest Service outsourcing efforts. Union officials plan to meet with the GAO to discuss what expenditures ought to be measured, says Thatcher, who serves as president of Libby’s local employee union as well as legislative chairman for the Forest Service Council of NFFE. The union believes the audit will reveal unforeseen costs of competitive sourcing and potentially succeed in turning public and Congressional opinion against the administration’s strong urging of the plan. And as Bush slides toward the end of his term, his push to privatize may lose some of its power, Thatcher says.
Thatcher joined five other Montana Forest Service workers and a couple dozen national union representatives in Washington, D.C., for a week in mid-May. They urged Congressional delegations to support a moratorium on the agency’s competitive sourcing activities until the GAO completes its review of the program. Thatcher and Dougan say Burns verbally agreed to support such a moratorium, though Burns’ spokesman Matt Mackowiak says it’s premature to talk about such a move, because the politics behind it aren’t as simple as they sound. The White House and its Office of Management and Budget (OMB) are strongly opposed to any action that would slow competitive sourcing programs and have fought similar moratoriums imposed on other agencies’ efforts.
Regardless of whether a moratorium is imposed during the audit’s duration, Dougan says that sooner or later the audit will provide information that Congress, the Forest Service and average citizens can use to form their judgments.
“The whole point of the audit is to take an objective, analytical look at the costs and benefits and then decide if this is a wise use of taxpayer funds,” Dougan says. “It doesn’t make sense that we would allow money to continue being spent on this until we know we’re getting the best bang for our buck.”
Since 2002, there’s been a steady evolution of reorganization efforts within the Forest Service. At the urging of the President’s Management Agenda and the OMB, which directed all federal agencies to consider competitive sourcing for their “commercial activities,” the Forest Service established its Competitive Sourcing Program Office. Early on, agency plans slated a few thousand positions for competition.
But a December 2005 draft of the Green Plan, the latest that unions have seen, outlines an ambitious strategy to study more than 24,000 of the Forest Service’s 31,000 or so full-time positions from 2005 to 2009. The studies are conducted under the rules of OMB’s Circular A-76, which was revised in 2003 to both increase and streamline public-private competition for federal jobs.
Under federal law, there are two types of federal positions: “Inherently Governmental,” which refers to functions “intimately related to the public interest” like financial and managerial decisions; and “Commercial,” which includes everything else.
A two-phase study process is planned for many of the Forest Service’s commercial jobs. In the feasibility phase, it will be determined whether jobs might be more efficiently performed by: 1) competition—which opens positions up for bidding by either private companies or teams of federal employees; or 2) Business Process Reengineering (BPR), which keeps the jobs in-house but centralizes and streamlines the work under a new organizational structure. When the agency opts for competition, federal employees have a strong record of securing contracts: OMB reported that public servants—in all agencies, not just the Forest Service—won competitions 90 percent of the time in 2004, though that figure dropped to 60 percent in 2005.
Since 2002, information technology, budget and finance and human resources have all been subjected to the two-phase study process. Information technology jobs nationwide were competitively sourced and a group of federal employees won the bid, downsizing 50 percent from 1,260 full-time positions to 538, according to the Forest Service. Studies found that the other two departments—budget and finance and human resources—would be best served through BPR and have shifted 1,000 budget and finance jobs into a smaller, more centralized organization. Nationwide, about 800 human resources jobs are currently being consolidated into a new center in Albuquerque, N.M., which will open partially in August and fully by late 2007.
Going forward, the Green Plan is aimed at studying all the remaining commercial positions, and a feasibility study on communications has already been completed. According to Myers, the agency will announce a competition for those jobs by the end of June. Feasibility studies for geospacial technology and fleet management are newly completed and will undergo BPR, Myers says. A study on aviation management is underway and should be completed by January. More than 17,000 other jobs are scheduled for studies in fiscal year 2007, though Myers cautions that unpublished changes to the Green Plan since the 2005 draft will doubtless affect those numbers.
Questions about money spent versus money saved on competitive sourcing are not easy to sort out, mostly because of the sheer size and complexity of the agency. The Forest Service, responsible for managing 193 million acres in 44 states, is the largest employer within the U.S. Department of Agriculture and runs on a total budget of $4.74 billion for fiscal year 2006. In various documents, OMB and Forest Service numbers claim a wide range of savings due to competitive sourcing. Numbers provided by the Forest Service union, the results of their own independent studies, similarly fluctuate.
A close look at one example of competitive sourcing within the agency—information technology infrastructure—can perhaps lend some insight.
In 2004, the Forest Service competed its entire IT infrastructure and a team of federal employees won the bid, which encompassed most of the agency’s computers, electronic networks, telephones, video operations and radios. The new team formed a separate organization within the Forest Service to consolidate and downsize the former structure, and opened for operation in February 2005. Thatcher explains how the new system works: If he has a computer problem, instead of asking Rita across the hallway for help, he calls a phone number and is issued a ticket number. The ticket works its way through the system and someone calls him back to try to fix the problem over the phone. If necessary, a technician may be dispatched.
Betsy Evans, a local Forest Service union leader in the Flathead, says she’s been frustrated by the change. Five people in her Kalispell office, with whom she’s worked for years, are now part of the newly configured IT operation, and if she has a problem, she’s prohibited from requesting their help and they’re prohibited from offering. Instead, she has to call the national number like everyone else, get a ticket and work with whoever happens to call back.
A Forest Service report analyzing the new IT system found that employees nationwide feel “frustrated, burdened, and even reluctant to use the system at all” and are spending more time working to resolve computer issues. Thatcher, Evans and Dougan all cite similar frustrations, saying they just don’t get how the new system, which has created a whole new layer of complexity, could possibly be more efficient.
Heidi Valetkevitch in the national Forest Service press office says IT competitive sourcing is planned to save the agency $16.8 million in 2005, an amount that doesn’t include the cost of studying and implementing the changes.
Besides impacts on employee life, which may not be an issue that concerns most Americans, Thatcher sees other impacts that may mean more to the general public: How the forests and Montana’s small communities will fare as the Forest Service trends toward reorganization.
Paula Nelson, media officer for Forest Service Region 1, which includes Montana along with parts of Idaho, Wyoming and the Dakotas, isn’t sure how many regional positions have been affected by the recent organizations.
But it’s easier for Thatcher, who works from the smaller Libby office, to notice the impact that the three recent reorganizations have had: 34 jobs in IT and budget and finance were moved out of town, and another eight will disappear when the new human resources division opens in New Mexico, he says. Besides the direct effects on those employees who either moved or left the Forest Service, Thatcher says, their spouses and children were pulled from their jobs or schools in order to keep families together.
“Nobody seems to be thinking about what the impacts are to the small towns,” Thatcher says. “Nobody seems to care and that’s wrong.”
Myers says it’s the agency’s responsibility to be prudent with the public’s money, and Thatcher and others agree with her on that point. They’re just not convinced that the community costs are being compensated for in other ways.
And the Forest Service’s scattering infrastructure impacts more than just small communities and their economies.
Dougan says one of the union’s key concerns is how the agency’s fire-management abilities will be affected by competitive sourcing and/or reorganization. Under the current decentralized system of 31,000 employees, he says, about 15,000 who aren’t dedicated to fire work hold qualifications that enable them to respond and participate in incident command should their efforts be required in an emergency.
“If you study my wildlife biology job and outsource that work so my job goes away, the other thing you’re losing is all the work I do in terms of fire suppression—that won’t be picked up by the contractor,” Dougan says. “We have this real potential to decimate our ability to continue to perform wildfire suppression efforts in this agency even as we potentially outsource non-fire work.”
Once again, the response from Myers is that competitive sourcing won’t endanger the mission of the Forest Service. All contracting will take into account fire work, Myers says, and make up for anything that gets lost. Thatcher remains unconvinced.
“What we’re afraid of is the FEMA-ization of the Forest Service. Our incident command structure works and we’re damn good at it and now we’re going to take it apart just to try to put it back together?” he asks incredulously.
In the newly remodeled basement of the Lolo National Forest Supervisor’s Office, located at Fort Missoula, sits a local example of major changes afoot in the Forest Service. Region 1’s new Administrative Center for Excellence (ACE), which opened its doors June 5, is staffed by 21 employees, nearly all of whom recently moved here from small communities in Montana and Idaho and are settling into brand-new positions. Boxes are being unpacked and a few offices remain dark. ACE Manager Lynn Johnson explains that in 2005 all nine regions of the Forest Service were directed to reduce overhead costs, and Region 1 has been trying to find a way to cut $16 million from its overall budget of about $307 million by 2008. Cuts targeted administrative support activities and aimed at centralizing work that had formerly been spread throughout the region’s 13 forests, eliminating about 80 positions at district offices throughout the area. Region 1 then created ACE’s 21 positions to carry out the bulk of that work, though part of the load is borne by those in the districts’ remaining positions.
“ACE is Region 1’s idea of how to get under the cost cap,” Johnson says. “This is the only way we could do it.”
Though not the product of competitive sourcing or BPR, ACE conforms to the Forest Service mandate to rein in budgets.
Thatcher is disturbed by the overall trend of fragmenting workers’ tasks and isolating one category of labor in a centralized facility. That system may work for other agencies, like the Department of Defense, which has long employed competitive sourcing, but the Forest Service is another story, he says, due to the country’s widely dispersed lands and their wide-ranging needs.
“They’re trying to make competitive sourcing one-size-fits-all, but it doesn’t fit the Forest Service. When you’re building widgets, you can have someone else do that work, but when you’re doing land management, it just doesn’t work that way,” Thatcher says.
And if the centralized, competitive tactic ultimately proves inefficient in the long run, he asks, will the agency attempt to return to its now-current organization? Would it be too late to save what the Forest Service already has—a 100-year-old organization that covers a lot of ground, albeit in a complicated and somewhat unwieldy way?
Dougan says the agency’s fast changes will eventually, and likely sooner rather than later, affect its interactions with a public that’s used to working with employees who live near the campgrounds, who go to work every day in the forests they’re managing.
“If we continue to do things the way we’re doing them, I think we could end up with an agency far different than it is today,” Dougan says. “If all that work is contracted out, the Forest Service would move from being an agency that provides resource management to nothing more than an agency that does contract administration. That’s a very different agency, and I think the public would end up with very different services and not have their expectations met.”
Two former chiefs of the Forest Service, Jack Ward Thomas and Mike Dombeck, sound cautionary notes about outsourcing, especially the large-scale competitive sourcing slated to happen under the Green Plan. While efficiency is an important goal, they agree, the upshot of what they learned in their long history with the agency is that both direct and collateral costs of outsourcing outweigh savings.
“In my 25 years in government, we studied outsourcing many times, and it has never been the panacea that many politicians say it can be,” Dombeck says.
Specifically, Thomas says, disruption, loss of morale and the use of private contractors who may not be as dedicated to the Forest Service’s mission of “caring for the land and serving people” as public employees tally immeasurable costs.
“Obviously, government should be as efficient as possible, but there’s a lot more to measure than dollars in and dollars out,” Thomas says. “It’s a complex issue and it’s just not as simplistic as they want it to be.”
Dombeck also sees a major philosophical issue looming around initiatives like the Green Plan: “The big question should be: Do the American people want to entrust our public lands to a private-sector corporation?”
The message handed down by Forest Service administrators—on cost savings, human infrastructure and efficiency—is that the Green Plan and its provisions are nothing to fret over and that everything is going to be just fine, if not better than it has been.
It’s too early to know whether that will turn out to be true.
But regardless of whether the sea of change flooding over the Forest Service proves to be positive or not, it entails massive change, and that in itself is taking its toll on the organization. Forest Service managers recognize that suffering employee morale is one consequence of competitive sourcing efforts that are creating mass uncertainty throughout the agency. Forest Service union representatives, protected by their role, are most vocal on these issues. Doug Law, a Missoula union representative and Region 1 national vice president for NFFE, says local union grievances have spiked by 40 percent in the last few years. He thinks the problem will only grow worse as the agency widens its net of competitive sourcing studies.
“Morale is at an all-time low because employees are constantly having to do studies of their own jobs,” Law says. “Everybody’s tied up doing the studies and tied up in emotional knots over their jobs.”
Even Media Officer Paula Nelson, who just finished filling out the agency’s competitive sourcing questionnaire that catalogs what work she does and what percentage of her day she spends doing it, can’t help but pick up on the anxiety.
“I think people are really afraid—things are going to be very different but they don’t know if it’s good or bad,” she says.
Nelson is particularly tuned into the change since her communications job will be subject to competitive sourcing later this year. Even though the decision to solicit competition for nearly 900 agency communications positions—encompassing work on audio/visuals, websites, graphics, printing and nonscientific writing—has already been made, no further details are known, she says. A team of federal employees, including Nelson, will doubtless bid to keep their jobs but the new contract will specify a new downsized organization. Should federal employees win the contract bidding, they’ll be required to recompete every five years to keep their jobs. Should they lose the contract, it’s unlikely public employees would ever regain that work, since the human infrastructure would be dissembled and scattered.
“I don’t know whether to run around and say the sky is falling or tell people not to worry,” Nelson says. “I just don’t know—it’s all new terrain.”
Nelson, who’s worked for the Forest Service the last 31 years, finds herself surrounded by change. Over the last few years, she has seen the Region 1 headquarters, located in downtown Missoula, consolidate from three floors of the building to two, since so many offices were sitting empty and the department needed to save on rent. She says she tries to look at the situation through the eyes of taxpayers, who Bush says deserve a better return for their tax dollars; she tries to trust that the study process will yield the right answers and sounds hopeful that the future will bring more certainty. But for now, uncertainty rules the day.
“Any change is challenging and there’s a ton of change going on right now for our organization for many reasons,” Nelson says. “I’m too close to it to know how it’s all fitting together.