May 24, 2004

The Honorable J. Dennis Hastert

Speaker of the US House of Representatives

235 Cannon HOB

Washington, DC 20515-1314

Dear Mr. Hastert:

Competitive sourcing studies allow GSA to examine its business
practices, make improvements where necessary, and create efficiencies
that benefit the government and ultimately, the American taxpayer. The
General Services Administration is pleased to report its fiscal year
2003 progress for this important element of the President's Management
Agenda, which includes sixteen competitions under both the old Office of
Management and Budget (OMB) Circular A-76 and the Revised Circular A-76.
The GSA is also pleased to report on its fiscal year 2004 planned and
announced competitions.

As a regular course of business, the GSA continues to work toward
ensuring that the OMB Circular A-76 is used as a valuable management
tool, and that its procedures become a permanent part of every manager's
toolbox. With this in mind, we are strategically applying the process
across agency boundaries and are in the preliminary planning phase of
the government's [*first two agency-wide*]{.underline} studies. These
studies will focus on our Marketing and Administrative Support functions
and should result in enhanced insight and best practices for civilian
agencies to use in the future.

The GSA's progress is due largely to the support of its senior
management team, which foresaw the need for continuing, high-level
executive support for competitive sourcing. During September of 2002,
the agency established a Competitive Sourcing Executive Committee
comprised of representatives from the Regions and each of the Services
and major Staff Offices. Specifically, the Committee includes the
Associate Administrator for Performance Improvement; Deputy
Commissioner, Federal Supply Service; Deputy Commissioner, Public
Buildings Service; Chief Financial Officer, Federal Technology Service;
Chief Financial Officer; Chief People Officer; Regional Administrator,
National Capital Region; Regional Administrator, Great Lakes Region;
General Counsel; and the Chief Information Officer.

One of the first actions taken by the Committee was an initiative to
develop a strategic agency-wide approach to competitive sourcing in
order to avoid the arbitrary selection of functions from the various
Services and Staff Offices for annual review. The Committee worked with
a consulting contractor to come to consensus on key elements that drive
the agency toward meeting its mission goals.

In the end, a management tool was crafted for every office to use when
evaluating commercial activities for consideration for competition. The
criteria for consideration was weighted and broken down into three main
categories: 1) business impact, 2) economic feasibility, and 3)
consistency. Each of these categories was further supported by
sub-criteria that were given a weight according to their importance
relating to the GSA's mission.

Each Service and Staff Office used the management tool to rate the
commercial functions in their organization for competitive sourcing.
These ratings were then integrated with each organization's Strategic
Management of Human Capital plans in order to determine which functions
should be competitively sourced. After this process was completed, the
lists were aggregated and used to develop the agency's plan for fiscal
year 2004, which involves competing approximately 811 FTE. This process
has facilitated in the creating of the agency's FAIR Act Inventory and
is also being used to inform the development of a long-range "green"
competition plan.

The GSA also formally established a Competitive Sourcing Working Group
Team. The Team, comprised of individuals that developed GSA's first FAIR
Act Inventory, became a permanent fixture during FY 2002 and was
responsible for overseeing the implementation of GSA's Competitive
Sourcing Plan for FY 2002 and FY 2003. They continue to review OMB
guidance on the FAIR Act Inventory and make recommendations to the
Competitive Sourcing Executive Committee on policy issues, as well as
acting as liaisons to their respective offices on all related
competitive sourcing issues. The Team is comprised of the following
members: Office of Performance Improvement (3 Representatives), Federal
Supply Service (2 Representatives), Federal Technology Service (2
Representatives), Public Buildings Service (2 Representatives), Office
of the CFO (2 Representatives), General Counsel (2 Representatives),
Human Resources (4 Representatives), Region 3 Representative, Small
Business Utilization Representative, Acquisition Policy Representative,
and Office of Citizen Services and Communications Representative.

As the competitive sourcing and Human Capital strategies mature GSA
expects to undergo a transformation in the way it manages its business
processes. Reliance on technology and associates with mission critical
skills will ensure the agency maintains its status as a valued federal
service provider.

The GSA continues to commit to ensuring the competitive sourcing process
is implemented in a fair and transparent manner so all parties involved
understand our goal of improving government program service on behalf of
American taxpayers.

If your staff has any questions regarding the contents of this letter,
please have them contact Susan Marshall, Associate Administrator, Office
of Performance Improvement, at (202) 501-1104.

Sincerely,

Stephen A. Perry

Administrator

Enclosures