# Presentation: 417584

## NASA’s Implementation of the  FAIR Act Inventory and Competitive Sourcing

- Presentation to NASA CON 301
- June 2003

## Linkage

- Federal Activities Inventory Reform Act
- Annual Commercial Inventory
- OMB Inherently Governmental Inventory
- Revised OMB Circular A-76
- President’s Management Agenda
- Competitive Sourcing Plan

## OMB Status 4/11//03				

- OMB Status 4/11//03

- NASA version 4/21/03

- OMB Progress 4/11/03

- OMB NASA plan

- Vicki Novak

-  Tom Luedtke

-  Gwen Brown

- Pat Dunnington

- Steve Isakowitz

- 3/03

- 5/02

- 3/03

- 3/03

- 5/02

- OMB/OPM approved SHCP/SHCIP
- Identify skills gaps in mission critical areas via an Agency wide Competency Management Model
- Pilot/implement actions to expand development activities based on mobility study results
- Increase use of HC flexibilities to recruit/retain
- Develop HC tools and strategies for a more flexible workforce
- Use HC technologies to maximize productivity of human capital (e.g., e-hiring, e-classification, e-learning. etc.)
- Establish strategies for leadership/knowledge management continuity
- Link employee rewards, recognition and performance to Agency key goals

- Submit FAIR Act inventory to OMB
- Submit competitive sourcing plan to OMB
- OMB approval of FAIR Act Inventory
- OMB Approval of Competitive Sourcing Plan Phase I (~15%)
- OMB Approval of Competitive Sourcing Plan Phase II
- Begin implementation of OMB approved competitive sourcing (Phase I)
- Begin implementation of OMB approved competitive sourcing (Phase II)
- Complete inventory of Inter-service Support Agreements (ISSAs), FFRDC, etc.
- Develop OMB plan for ISSA, FFRDC, etc. competitions

- IFMP Implementation
- IFMP core finance at pilot center
- Wave 1 Centers
- Wave 2 Centers
- Wave 3 Centers
- Interim MIS
- Audited Financial Statements
- Resolution of all outstanding FY2001 issues
- Closing of FY02 books
- “Clean” audit opinion
- Action plan to resolve remaining material weaknesses
- Systems are FFMIA compliant

- E-Gov Implementation
- Strengthen common infrastructure in support of NASA’s E-Gov activities
- Participate in Federal E-Gov Initiatives
- Implement OneNASA Web portal to provide integrated content to NASA’s customers
- Strategic Alignment of IT
- Implement agency enterprise architecture
- Strengthen alignment of  IT within NASA to improve IT planning and policy compliance activities
- Resolve open IT security weaknesses
- Complete revisions to IT business cases

- Full Cost
- Recast FY2003 budget in full cost
- Develop FY2004 full cost budget
- Demonstrate Agency wide use of full cost budgeting and mgmt
- Performance Budgeting
- PART provided for 20% of programs/theme areas per OMB Spring Review
- Develop Performance Budget Document Concept with OMB
- Submit budget through electronic clearinghouse
- Submit Performance Budget Document to OMB
- Submit NASA Budget using Performance Budget Document concept

- Steps to Yellow
- Resolve auditor material weaknesses
- System becomes FFMIA compliant
- Administrator issue an unqualified assurance statement under FFMIA

- Steps to Yellow
- Provide new, more complete set of business cases that correct prior deficiencies
- Address cost, schedule, and performance goals

- Steps to Yellow
- Complete final Competitive Sourcing plan

- Steps to Green
- Implement Strategic Human Capital plan
- Integrate competency mgmt system with other agency plans and mgmt tools

- Steps to Green
- Improve performance metrics
- Demonstrate across agency budget decisions and mgmt based on full cost considerations

## OMB Status 4/11//03				

- OMB Status 4/11//03

- Human capital strategies are linked to agency mission and goals
- Organization is restructured as appropriate to provide optimal service at lowest cost and respond to changing business needs; strategies include redeployment, delayering, competitive sourcing, and E-Gov
- Continuity of leadership and knowledge is assured through succession planning and professional development
- Performance appraisals for SES and mgrs link to agency mission and are cascaded appropriately throughout more than 60% of the agency
- Workforce is diverse, including mission critical occupations and leadership
- Current and future skill gaps in mission critical occupations are identified and reduced
- Human capital program is guided by measurable outcomes

- People, systems and resources are in place to conduct scheduled public/private competitions
- Target timeframe for competitions is 12 months
- Competitive sourcing for 16% of commercial activities completed
- Completed competitions improve productivity and produce annual savings

- NASA version 4/21/03

- OMB Progress 4/11/03

- OMB NASA plan

- Vicki Novak

-  Tom Luedtke

-  Gwen Brown

- Pat Dunnington

- Steve Isakowitz

- 3/03

- 5/02

- 3/03

- 3/03

- 5/02

- Meet accelerated November 15th deadline for audited financial statements
- Receive clean opinion on audited financial statements
- Resolve auditor-identified and Integrity Act material weakness in internal control
- Agency funds are disbursed in strict compliance with appropriations law
- Financial systems are integrated and provide timely and reliable financial information
- Financial and performance information is routinely considered during operational evaluation and decision-making
- Monthly financial performance metrics reported, tracked vs. goals, and available on line at agency
- Substantially reduce erroneous payments
- Migrate to government-wide payroll providers

- Focus IT spending on high priority modernization initiatives
- Major IT projects are within 10% of cost/schedule/ performance objectives
- Major IT systems have been certified, accredited, or otherwise authorized as being properly secured
- Agency contributes to, and participates in, 3 of the 4 categories of E-Gov initiatives rather than creating redundant, or agency unique, IT projects

- Completion of PART ratings for all programs
- Performance measures are more focused and useful to policy makers.  All measures meet the high standards of the PART.
- Senior agency managers regularly measure information to inform management decisions
- The full cost of achieving performance goals is accurately (+/- 10%) reported in the budget and performance documents and the marginal cost of changing performance goals can be accurately estimated (+/- 10%)
- Budget submissions to OMB and justifications to Congress explain how PART ratings informed budget decisions for each program assessed
- Agencies use PART evaluations to direct program improvements and PART ratings are used consistently to justify funding requests, management action and legislative proposals.

## What NASA Did:Inventory Infrastructure

- Moved Inventory Accountability to Procurement (parallel to OFPP lead of competitive sourcing)
- Established Agency Competitive Sourcing Team
- Established agency-wide network for developing the inventories and Competitive Sourcing Plan
- Established Competitive Sourcing Review Board of senior agency officials
- Established agency competitive sourcing website

## What NASA Did:Our Inventory Process

- Initiated weekly agency-wide telecons
- Conducted briefings, presentations, ViTS
- Called for inventories and plans (w/guidance)
- Required Centers’ inventories to include rationale
- Analyzed inventories for discrepancies
- Required Center presentations
- Developed supplemental direction for consistency
- Called for revised inventories
- Reviewed inventories for compliance
- Submitted to OMB

## Myths Impeding the Development of a High Quality Inventory

- “Commercial” means you can go out and buy it (No, it means “not inherently governmental)
- All activities which are performed by government employees are inherently governmental
- If it’s core capability, then it’s inherently governmental
- Employees who perform commercial activities are not as important to the organization
- If the activity you perform is coded commercial, then you definitely will be outsourced

## NASA’s Basic Ground Rules

***It is the activity performed, not the job series, that determines inherently governmental or commercial.***
***	***
***All activities are to be categorized as commercial unless they are unequivocally inherently governmental!******	***

## Inherently Governmental Activities

- An inherently governmental function involves, among other things, the interpretation and execution of the laws of the United States so as to:
- (a) bind the United States to take or not to take some action by contract, policy, regulation, authorization, order, or otherwise;
- (b) determine, protect, and advance its economic, political, territorial, property, or other interests by military or diplomatic action, civil or criminal judicial proceedings, contract management, or otherwise;

## Inherently Governmental Activities(Continued)

- (c) significantly affect the life, liberty, or property of private persons;
- (d) commission, appoint, direct, or control officers of employees of the United States; or
- (e) exert ultimate control over the acquisition, use, or disposition of the property, real or personal, tangible or intangible, of the United States, including the collection, control, or disbursement of appropriated and other Federal funds.

## Examples of Inherently Governmental Activities

-   The determination of agency policy, such as determining the content and application of regulations, among other things.
-   The determination of Federal program priorities or budget requests.
-   The direction and control of Federal employees.
-   The selection or nonselection of individuals for Federal Government employment.
-   The awarding, administering, and terminating of contracts.

## FAIR Act Inventory

- Commercial Activities must be given a reason code
- REASON CODES FOR COMMERCIAL ACTIVITIES INVENTORY
- A  The Commercial Activity is not appropriate for private sector   performance pursuant to a written determination.
- B  The Commercial Activity is suitable for a Cost Comparison or a Direct Conversion.
- C  The Commercial Activity is the subject of an in-progress Cost Comparison or Direct Conversion.
- D  The Commercial Activity is performed by a Most Efficient Organization (MEO) resulting from a Cost Comparison decision made within the past five years.
- E  The Commercial Activity is pending an agency approved
-     restructuring decision (e.g., closure, realignment).
- F  Performance of the commercial activity by government
-     personnel is required due to a statutory prohibition against private sector performance.

## Examples of NASA’s Specific Coding Direction

- IPA Assignments and Co-ops – Whether or not individuals are working as IPAs or Co-ops is not relevant as to characterizing their activity as  inherently governmental or commercial.  Rather, all FTE are to be coded consistent with the function they are performing.
- Public Affairs Offices – All are to be coded as commercial unless they meet the test for inherently governmental.  Code them as Reason Code A if they are personally representing NASA.  Otherwise they are coded as B.

## Examples of NASA’s Specific Coding Direction (Continued)

- Driving and Delivery Functions – All are to be coded commercial Reason Code A or B
- Contract Closeout Support – All are to be coded as commercial, Reason Code B.
- Administrative Support, Program Support, Secretaries:  Code all as commercial.

## RDT&E is 68% of NASA’s Work Force:Which Are Inherently Governmental?

*a.  * Project Scientists and Task Managers to the extent they  provide advice of a nature so extensive and so far advanced toward completion as to limit the decision-makers’ discretion and to restrict the agency’s ability to develop and advance options other than those provided, e.g. award fee and past performance recommendations.
- b.   COTRs to the extent they provide COTR services and Technical Management Representatives.
-         Surveillance activities that enable the government to accept risk associated with processing and/or launch to meet federal acquisition requirements and indemnify the contractor.
-         Overseeing design activities for both NASA and contractors
- c.    Approving test and other certification documentation.
- d.    Approving requirements that are called out in the contract.  (Approving lower level requirements is not inherently governmental.)
- e.    Accepting contractor products and services.

## RDT&E is 68% of NASA’s Work Force:Which Are Inherently Governmental? (Continued)

- f.   Providing corporate system level knowledge to approve statements of work and specifications.
- g.   Overseeing design activities for both NASA and contractors.
- h.    Approving technical evaluations of processing changes, and anomalies and discrepancies reports.
- i.    Other Managers/Supervisors of government employees (only when at least some of the employees they supervise are engaged in inherently governmental activities).
- j.   Approving payments of Government funds.
- k.   Formulate, defend, and manage budget.  Specifically, Program Analysts who advise management on the relationship, appropriateness, and adherence to Agency, Congressional, and Executive policy.
- l.	Represent the government on national and international partner agreements and commitments.

## FAIR Act Inventory

- Focused on providing clear guidance
- Achieved fairly consistent classification
- 2002 significant increase in commercial activities
- 2002 and 2003 significant increase in Reason Code B

## Current Status

- Submitting Commercial 2003 FAIR Act Inventory
- Submitting Inherently Governmental Inventory
- NASA’s 2002 inventories were in the first batch of OMB approved inventories on 10-17-2002

## Commercial Activities FTE Increased 70% over 2001 Inventory!

|  | 2000 | 2001 | 2002 | 2003 |
| --- | --- | --- | --- | --- |
| IG | 13,787 | 14,612 | 11,600 | 12,072 |
| Reason Code A | 2,438 | 2,399 | 2,382 | 2,591 |
| Reason Code B | 0 | 0 | 1,549 | 4,380 |
| Old Reason Code C | 2,188 | 1,934 | 3,474 | D 7 |
| Commercial Totals | 4,626 | 4,333 | 7,405 | 6,978 |
| Grand Totals | 18,413 | 18,945 | 19,005 | 19,050 |

## Why NASA Was Successful

- Strong, visible support from the Administrator
- Central, dedicated team supporting a senior-level review board
- Agency-wide network
- Bottom-up review of inventory process
- Clear direction and examples
- Built totally new, not updated, inventory

## Competitive Sourcing Plan

## Competitive Sourcing

- Government-wide Initiative Required by President’s Management Agenda
- Government-wide goals of:
- 5% 	for FY 2002
- 15% 	for FY 2003
- 50% 	for FY TBD
- 435,000 civil service FTEs to be “exposed to competition”
- Expected dollar saving range: 20%-50%
- All agencies to submit plans to OMB

## Exposing Government Activities to Competition

- Not necessarily outsourcing but...**competing,** comparing, or converting.
- The process of competition provides a focus on continuous improvement.
- The objective is to focus on the most effective and efficient way of accomplishing the agency’s mission regardless of whether it is done by civil servants or contractors.

## What counts as competitive sourcing and can be included in our competitive sourcing plan? 

- OMB Circular A-76 competitions (standard and streamlined)
- FAR-Based Competitions 				(IT and CSO-approved for Best Value)

## Related Activities

- 10-Year Look Back Study
- Inventory and Develop Competitive Sourcing Plan for: Inter-Service Support Agreements, Federally Funded Research and Development Centers (FFRDCs), University Affiliated Research Centers (UARCs), Commercial Centers for the Development of Space (CCDSs), University Research, Engineering and Technology Institutes (URETIs), and similar contracts and partnerships

## OMB Circular A-76 Revision

## Need More Information?

**Agency Competitive Sourcing Team:**
- Joe LeCren 	202-358-0431 	jlecren@hq.nasa.gov
- Ron Lentz 		202-358-1064 	rlentz@hq.nasa.gov
- Deborah O’Neill 	202-358-1534 	doneill@hq.nasa.gov
- Ken Sateriale 	202-358-0491 	ksateria@hq.nasa.gov
**http://www.competitivesourcing.nasa.gov**** **