[SOCIAL SECURITY]{.underline}

The Commissioner

December 22,2004

The Honorable Richard B. Cheney President of the Senate Washington, D.C.
20510

Dear Mr. Vice President:

The purpose of this letter is to transmit to you the Social Security
Administration\'s (SSA) Report to Congress on Fiscal Year (FY) 2004
Competitive Sourcing Efforts as required by the Consolidated
Appropriations Act of Fiscal Year 2004. The report has been prepared in
accordance with the Office of Management and Budget\'s (OMB) guidelines.

The FY 2004 OMB guidance adds several new elements to the FY 2003
instructions to improve the usefulness of the data collected. Included
in this year\'s report are competitive sourcing activities that have
been completed in FY 2004, achieved cost savings and/or quantifiable
performance improvements on competitions completed in FY 2003, and fixed
costs for FY 2004.

SSA continues to be focused on results that create more efficient
functions within the Agency, generate cost savings and improve
performance. In FY 2004, SSA completed two competitive sourcing
competitions involving a total of 77 full time equivalents (FTE). One of
those competitions, the Systems Help Desk competition resulted in an
Agency win with a cost lower than baseline cost by \$35,364,000, over
the five year performance period. This competition enabled the Agency to
place FTEs in areas of need, allowing SSA to better serve the American
public.

Through a measured, consistent approach to competitive sourcing, SSA is
continuing its efforts in becoming a \"most efficient organization\" in
order to provide better service to the American public.

If there are any questions concerning the report, your staff may contact
Myrtle S.. Habersham, Chief Strategic Officer at 410-965-7401.

Enclosures:

Tab A - FY 2004 Competitive Sourcing Activities Summary

Tab B - Narrative Statements on:

Projected Number of FTEs Scheduled for Competition in FY 2005 How
Savings Were Calculated for Each Competition

How Fixed Costs Were Determined

Tab C - Alignment of Competitive Sourcing and Human Capital

[SOCIAL SECURITY]{.underline}

The Commissioner

December 22,2004

The Honorable J. Dennis Hastert Speaker of the House of Representatives
Washington, D.C. 20515

Dear Mr. Speaker:

The purpose of this letter is to transmit to you the Social Security
Administration\'s (SSA) Report to Congress on Fiscal Year (FY) 2004
Competitive Sourcing Efforts as required by the Consolidated
Appropriations** **Act of Fiscal Year 2004. The report has been prepared
in accordance with the Office of Management and Budget\'s (OMB)
guidelines.

The FY 2004 OMB guidance adds several new elements to the FY 2003
instructions to improve the usefulness of the data collected. Included
in this year\'s report are competitive sourcing activities that have
been completed in FY 2004, achieved cost savings and/or quantifiable
performance improvements on competitions completed in FY 2003, and fixed
costs for FY 2004.

SSA continues to be focused on results that create more efficient
functions within the Agency, generate cost savings and improve
performance. In FY 2004, SSA completed two competitive sourcing
competitions involving a total of 77 full time equivalents (FTE). One of
those competitions, the Systems Help Desk competition resulted in an
Agency win with a cost lower than baseline cost by \$35,364,000, over
the five year performance period. This competition enabled the Agency to
place FTEs in areas of need, allowing SSA to better serve the American
public.

Through a measured, consistent approach to competitive sourcing, SSA is
continuing its efforts in becoming a \"most efficient organization\" in
order to provide better service to the American public.

If there are any questions concerning the report, your staff may contact
Myrtle S. Habersham, Chief Strategic Officer at 410-965-7401.

Enclosures:

Tab A - FY 2004 Competitive Sourcing Activities Summary

Tab B - Narrative Statements on:

Projected Number of FTEs Scheduled for Competition in FY 2005 How
Savings Were Calculated for Each Competition

How Fixed Costs Were Determined

Tab C - Alignment of Competitive Sourcing and Human Capital

[SOCIAL SECURITY]{.underline}

The Commissioner

December 22,2004

The Honorable E. Clay Shaw

Chairman, Subcommittee on Social Security Committee on Ways and Means

House of Representatives

Washington, D.C. 20515

Dear Mr. Chairman:

The purpose of this letter is to transmit to you the Social Security
Administration\'s (SSA) Report to Congress on Fiscal Year (FY) 2004
Competitive Sourcing Efforts as required by the Consolidated
Appropriations** **Act of Fiscal Year 2004. The report has been prepared
in accordance with the Office of Management and Budget\'s (OMB)
guidelines.

The FY 2004 OMB guidance adds several new elements to the FY 2003
instructions to improve the usefulness of the data collected. Included
in this year\'s report are competitive sourcing activities that have
been completed in FY 2004, achieved cost savings and/or quantifiable
performance improvements on competitions completed in FY 2003, and fixed
costs for FY 2004.

SSA continues to be focused on results that create more efficient
functions within the Agency, generate cost savings and improve
performance. In FY 2004, SSA completed two competitive sourcing
competitions involving a total of 77 full time equivalents (FTE). One of
those competitions, the Systems Help Desk competition resulted in an
Agency win with a cost lower than baseline cost by \$35,364,000, over
the five year performance period. This competition enabled the Agency to
place FTEs in areas of need, allowing SSA to better serve the American
public.

Through a measured, consistent approach to competitive sourcing, SSA is
continuing its efforts in becoming a \"most efficient organization\" in
order to provide better service to the American public.

If there are any questions concerning the report, your staff may contact
Myrtle S. Habersham, Chief Strategic Officer at 410-965-7401.

Enclosures:

Tab A - FY 2004 Competitive Sourcing Activities Summary

Tab B - Narrative Statements on:

Projected Number of FTEs Scheduled for Competition in FY 2005 How
Savings Were Calculated for Each Competition

How Fixed Costs Were Determined

Tab C - Alignment of Competitive Sourcing and Human Capital

[SOCIAL SECURITY]{.underline}

The Commissioner

December 22,2004

The Honorable Robert T. Matsui House of Representatives Washington, D.C.
20515

Dear Mr. Matsui:

The purpose of this letter is to transmit to you the Social Security
Administration\'s (SSA) Report to Congress on Fiscal Year (FY) 2004
Competitive Sourcing Efforts as required by the Consolidated
Appropriations Act of Fiscal Year 2004. The report has been prepared in
accordance with the Office of Management and Budget\'s (OMB) guidelines.

The FY 2004 OMB guidance adds several new elements to the FY 2003
instructions to improve the usefulness of the data collected. Included
in this year\'s report are competitive sourcing activities that have
been completed in FY 2004, achieved cost savings and/or quantifiable
performance improvements on competitions completed in FY 2003, and fixed
costs for FY 2004.

SSA continues to be focused on results that create more efficient
functions within the Agency, generate cost savings and improve
performance. In FY 2004, SSA completed two competitive sourcing
competitions involving a total of 77 full time equivalents (FTE). One of
those competitions, the Systems Help Desk competition resulted in an
Agency win with a cost lower than baseline cost by \$35,364,000, over
the five year performance period. This competition enabled the Agency to
place FTEs in areas of need, allowing SSA to better serve the American
public.

Through a measured, consistent approach to competitive sourcing, SSA is
continuing its efforts in becoming a \"most efficient organization\" in
order to provide better service to the American public.

If there are any questions concerning the report, your staff may contact
Myrtle S.. Habersham, Chief Strategic Officer at 410-965-7401.

Enclosures:

Tab A - FY 2004 Competitive Sourcing Activities Summary

Tab B - Narrative Statements on:

Projected Number of FTEs Scheduled for Competition in FY 2005 How
Savings Were Calculated for Each Competition

How Fixed Costs Were Determined

Tab C - Alignment of Competitive Sourcing and Human Capital

[SOCIAL SECURITY]{.underline}

The Commissioner

December 22,2004

The Honorable Tom Davis

Chairman, Committee on Government Reform

House of Representatives Washington, D.C. 20515

Dear Mr. Chairman:

The purpose of this letter is to transmit to you the Social Security
Administration\'s (SSA) Report to Congress on Fiscal Year (FY) 2004
Competitive Sourcing Efforts as required by the Consolidated
Appropriations Act of Fiscal Year 2004. The report has been prepared in
accordance with the Office of Management and Budget\'s (OMB) guidelines.

The FY 2004 OMB guidance adds several new elements to the FY 2003
instructions to improve the usefulness of the data collected. Included
in this year\'s report are competitive sourcing activities that have
been completed in FY 2004, achieved cost savings and/or quantifiable
performance improvements on competitions completed in FY 2003, and fixed
costs for FY 2004.

SSA continues to be focused on results that create more efficient
functions within the Agency, generate cost savings and improve
performance. In FY 2004, SSA completed two competitive sourcing
competitions involving a total of 77 full time equivalents (FTE). One of
those competitions, the Systems Help Desk competition resulted in an
Agency win with a cost lower than baseline cost by \$35,364,000, over
the five year performance period. This competition enabled the Agency to
place FTEs in areas of need, allowing SSA to better serve the American
public.

Through a measured, consistent approach to competitive sourcing, SSA is
continuing its efforts in becoming a \"most efficient organization\" in
order to provide better service to the American public.

If there are any questions concerning the report, your staff may contact
Myrtle S.. Habersham, Chief Strategic Officer at 410-965-7401.

Enclosures:

Tab A - FY 2004 Competitive Sourcing Activities Summary

Tab B - Narrative Statements on:

Projected Number of FTEs Scheduled for Competition in FY 2005 How
Savings Were Calculated for Each Competition

How Fixed Costs Were Determined

Tab C - Alignment of Competitive Sourcing and Human Capital

[SOCIAL SECURITY]{.underline}

The Commissioner

December 22,2004

The Honorable Henry A. Waxman House of Representatives Washington, D.C.
20515

Dear Mr. Waxman:

The purpose of this letter is to transmit to you the Social Security
Administration\'s (SSA) Report to Congress on Fiscal Year (FY) 2004
Competitive Sourcing Efforts as required by the Consolidated
Appropriations Act of Fiscal Year 2004. The report has been prepared in
accordance with the Office of Management and Budget\'s (OMB) guidelines.

The FY 2004 OMB guidance adds several new elements to the FY 2003
instructions to improve the usefulness of the data collected. Included
in this year\'s report are competitive sourcing activities that have
been completed in FY 2004, achieved cost savings and/or quantifiable
performance improvements on competitions completed in FY 2003, and fixed
costs for FY 2004.

SSA continues to be focused on results that create more efficient
functions within the Agency, generate cost savings and improve
performance. In FY 2004, SSA completed two competitive sourcing
competitions involving a total of 77 full time equivalents (FTE). One of
those competitions, the Systems Help Desk competition resulted in an
Agency win with a cost lower than baseline cost by \$35,364,000, over
the five year performance period. This competition enabled the Agency to
place FTEs in areas of need, allowing SSA to better serve the American
public.

Through a measured, consistent approach to competitive sourcing, SSA is
continuing its efforts in becoming a \"most efficient organization\" in
order to provide better service to the American public.

If there are any questions concerning the report, your staff may contact
Myrtle S.. Habersham, Chief Strategic Officer at 410-965-7401.

Enclosures:

Tab A - FY 2004 Competitive Sourcing Activities Summary

Tab B - Narrative Statements on:

Projected Number of FTEs Scheduled for Competition in FY 2005 How
Savings Were Calculated for Each Competition

How Fixed Costs Were Determined

Tab C - Alignment of Competitive Sourcing and Human Capital

[SOCIAL SECURITY]{.underline}

The Commissioner

December 22,2004

The Honorable Susan M. Collins

Chairman, Committee on Governmental Affairs United States Senate

Washington,** **D.C. 20510

Dear Madam Chairman:

The purpose of this letter is to transmit to you the Social Security
Administration\'s (SSA) Report to Congress on Fiscal Year (FY) 2004
Competitive Sourcing Efforts as required by the Consolidated
Appropriations Act of Fiscal Year 2004. The report has been prepared in
accordance with the Office of Management and Budget\'s (OMB) guidelines.

The FY 2004 OMB guidance adds several new elements to the FY 2003
instructions to improve the usefulness of the data collected. Included
in this year\'s report are competitive sourcing activities that have
been completed in FY 2004, achieved cost savings and/or quantifiable
performance improvements on competitions completed in FY 2003, and fixed
costs for FY 2004.

SSA continues to be focused on results that create more efficient
functions within the Agency, generate cost savings and improve
performance. In FY 2004, SSA completed two competitive sourcing
competitions involving a total of 77 full time equivalents (FTE). One of
those competitions, the Systems Help Desk competition resulted in an
Agency win with a cost lower than baseline cost by \$35,364,000, over
the five year performance period. This competition enabled the Agency to
place FTEs in areas of need, allowing SSA to better serve the American
public.

Through a measured, consistent approach to competitive sourcing, SSA is
continuing its efforts in becoming a \"most efficient organization\" in
order to provide better service to the American public.

If there are any questions concerning the report, your staff may contact
Myrtle S.. Habersham, Chief Strategic Officer at 410-965-7401.

Enclosures:

Tab A - FY 2004 Competitive Sourcing Activities Summary

Tab B - Narrative Statements on:

Projected Number of FTEs Scheduled for Competition in FY 2005 How
Savings Were Calculated for Each Competition

How Fixed Costs Were Determined

Tab C - Alignment of Competitive Sourcing and Human Capital

[SOCIAL SECURITY]{.underline}

The Commissioner

December 22,2004

The Honorable Joseph I. Lieberman United States Senate Washington, D.C.
20510

Dear Senator Lieberman:

The purpose of this letter is to transmit to you the Social Security
Administration\'s (SSA) Report to Congress on Fiscal Year (FY) 2004
Competitive Sourcing Efforts as required by the Consolidated
Appropriations Act of Fiscal Year 2004. The report has been prepared in
accordance with the Office of Management and Budget\'s (OMB) guidelines.

The FY 2004 OMB guidance adds several new elements to the FY 2003
instructions to improve the usefulness of the data collected. Included
in this year\'s report are competitive sourcing activities that have
been completed in FY 2004, achieved cost savings and/or quantifiable
performance improvements on competitions completed in FY 2003, and fixed
costs for FY 2004.

SSA continues to be focused on results that create more efficient
functions within the Agency, generate cost savings and improve
performance. In FY 2004, SSA completed two competitive sourcing
competitions involving a total of 77 full time equivalents (FTE). One of
those competitions, the Systems Help Desk competition resulted in an
Agency win with a cost lower than baseline cost by \$35,364,000, over
the five year performance period. This competition enabled the Agency to
place FTEs in areas of need, allowing SSA to better serve the American
public.

Through a measured, consistent approach to competitive sourcing, SSA is
continuing its efforts in becoming a \"most efficient organization\" in
order to provide better service to the American public.

If there are any questions concerning the report, your staff may contact
Myrtle S.. Habersham, Chief Strategic Officer at 410-965-7401.

Enclosures:

Tab A - FY 2004 Competitive Sourcing Activities Summary

Tab B - Narrative Statements on:

Projected Number of FTEs Scheduled for Competition in FY 2005 How
Savings Were Calculated for Each Competition

How Fixed Costs Were Determined

Tab C - Alignment of Competitive Sourcing and Human Capital

[SOCIAL SECURITY]{.underline}

The Commissioner

December 22,2004

The Honorable Charles E. Grassley Chairman, Committee on Finance United
States Senate

Washington, D.C. 20510

Dear Mr. Chairman:

The purpose of this letter is to transmit to you the Social Security
Administration\'s (SSA) Report to Congress on Fiscal Year (FY) 2004
Competitive Sourcing Efforts as required by the Consolidated
Appropriations Act of Fiscal Year 2004. The report has been prepared in
accordance with the Office of Management and Budget\'s (OMB) guidelines.

The FY 2004 OMB guidance adds several new elements to the FY 2003
instructions to improve the usefulness of the data collected. Included
in this year\'s report are competitive sourcing activities that have
been completed in FY 2004, achieved cost savings and/or quantifiable
performance improvements on competitions completed in FY 2003, and fixed
costs for FY 2004.

SSA continues to be focused on results that create more efficient
functions within the Agency, generate cost savings and improve
performance. In FY 2004, SSA completed two competitive sourcing
competitions involving a total of 77 full time equivalents (FTE). One of
those competitions, the Systems Help Desk competition resulted in an
Agency win with a cost lower than baseline cost by \$35,364,000, over
the five year performance period. This competition enabled the Agency to
place FTEs in areas of need, allowing SSA to better serve the American
public.

Through a measured, consistent approach to competitive sourcing, SSA is
continuing its efforts in becoming a \"most efficient organization\" in
order to provide better service to the American public.

If there are any questions concerning the report, your staff may contact
Myrtle S.. Habersham, Chief Strategic Officer at 410-965-7401.

Enclosures:

Tab A - FY 2004 Competitive Sourcing Activities Summary

Tab B - Narrative Statements on:

Projected Number of FTEs Scheduled for Competition in FY 2005 How
Savings Were Calculated for Each Competition

How Fixed Costs Were Determined

Tab C - Alignment of Competitive Sourcing and Human Capital

[SOCIAL SECURITY]{.underline}

The Commissioner

December 22,2004

The Honorable Ralph Regula

Chairman, Subcommittee on Labor, Health and Human

Services, and Education

Committee on Appropriations

House of Representatives

Washington, D.C. 20515

Dear Mr. Chairman:

The purpose of this letter is to transmit to you the Social Security
Administration\'s (SSA) Report to Congress on Fiscal Year (FY) 2004
Competitive Sourcing Efforts as required by the Consolidated
Appropriations Act of Fiscal Year 2004. The report has been prepared in
accordance with the Office of Management and Budget\'s (OMB) guidelines.

The FY 2004 OMB guidance adds several new elements to the FY 2003
instructions to improve the usefulness of the data collected. Included
in this year\'s report are competitive sourcing activities that have
been completed in FY 2004, achieved cost savings and/or quantifiable
performance improvements on competitions completed in FY 2003, and fixed
costs for FY 2004.

SSA continues to be focused on results that create more efficient
functions within the Agency, generate cost savings and improve
performance. In FY 2004, SSA completed two competitive sourcing
competitions involving a total of 77 full time equivalents (FTE). One of
those competitions, the Systems Help Desk competition resulted in an
Agency win with a cost lower than baseline cost by \$35,364,000, over
the five year performance period. This competition enabled the Agency to
place FTEs in areas of need, allowing SSA to better serve the American
public.

Through a measured, consistent approach to competitive sourcing, SSA is
continuing its efforts in becoming a \"most efficient organization\" in
order to provide better service to the American public.

If there are any questions concerning the report, your staff may contact
Myrtle S.. Habersham, Chief Strategic Officer at 410-965-7401.

Enclosures:

Tab A - FY 2004 Competitive Sourcing Activities Summary

Tab B - Narrative Statements on:

Projected Number of FTEs Scheduled for Competition in FY 2005 How
Savings Were Calculated for Each Competition

How Fixed Costs Were Determined

Tab C - Alignment of Competitive Sourcing and Human Capital

[SOCIAL SECURITY]{.underline}

The Commissioner

December 22,2004

The Honorable David R. Obey House of Representatives Washington, D.C.
20515

Dear Mr. Obey:

The purpose of this letter is to transmit to you the Social Security
Administration\'s (SSA) Report to Congress on Fiscal Year (FY) 2004
Competitive Sourcing Efforts as required by the Consolidated
Appropriations Act of Fiscal Year 2004. The report has been prepared in
accordance with the Office of Management and Budget\'s (OMB) guidelines.

The FY 2004 OMB guidance adds several new elements to the FY 2003
instructions to improve the usefulness of the data collected. Included
in this year\'s report are competitive sourcing activities that have
been completed in FY 2004, achieved cost savings and/or quantifiable
performance improvements on competitions completed in FY 2003, and fixed
costs for FY 2004.

SSA continues to be focused on results that create more efficient
functions within the Agency, generate cost savings and improve
performance. In FY 2004, SSA completed two competitive sourcing
competitions involving a total of 77 full time equivalents (FTE). One of
those competitions, the Systems Help Desk competition resulted in an
Agency win with a cost lower than baseline cost by \$35,364,000, over
the five year performance period. This competition enabled the Agency to
place FTEs in areas of need, allowing SSA to better serve the American
public.

Through a measured, consistent approach to competitive sourcing, SSA is
continuing its efforts in becoming a \"most efficient organization\" in
order to provide better service to the American public.

If there are any questions concerning the report, your staff may contact
Myrtle S.. Habersham, Chief Strategic Officer at 410-965-7401.

Enclosures:

Tab A - FY 2004 Competitive Sourcing Activities Summary

Tab B - Narrative Statements on:

Projected Number of FTEs Scheduled for Competition in FY 2005 How
Savings Were Calculated for Each Competition

How Fixed Costs Were Determined

Tab C - Alignment of Competitive Sourcing and Human Capital

[SOCIAL SECURITY]{.underline}

The Commissioner

December 22,2004

The Honorable Max Baucus United States Senate Washington, D.C. 20510

Dear Senator Baucus:

The purpose of this letter is to transmit to you the Social Security
Administration\'s (SSA) Report to Congress on Fiscal Year (FY) 2004
Competitive Sourcing Efforts as required by the Consolidated
Appropriations Act of Fiscal Year 2004. The report has been prepared in
accordance with the Office of Management and Budget\'s (OMB) guidelines.

The FY 2004 OMB guidance adds several new elements to the FY 2003
instructions to improve the usefulness of the data collected. Included
in this year\'s report are competitive sourcing activities that have
been completed in FY 2004, achieved cost savings and/or quantifiable
performance improvements on competitions completed in FY 2003, and fixed
costs for FY 2004.

SSA continues to be focused on results that create more efficient
functions within the Agency, generate cost savings and improve
performance. In FY 2004, SSA completed two competitive sourcing
competitions involving a total of 77 full time equivalents (FTE). One of
those competitions, the Systems Help Desk competition resulted in an
Agency win with a cost lower than baseline cost by \$35,364,000, over
the five year performance period. This competition enabled the Agency to
place FTEs in areas of need, allowing SSA to better serve the American
public.

Through a measured, consistent approach to competitive sourcing, SSA is
continuing its efforts in becoming a \"most efficient organization\" in
order to provide better service to the American public.

If there are any questions concerning the report, your staff may contact
Myrtle S.. Habersham, Chief Strategic Officer at 410-965-7401.

Enclosures:

Tab A - FY 2004 Competitive Sourcing Activities Summary

Tab B - Narrative Statements on:

Projected Number of FTEs Scheduled for Competition in FY 2005 How
Savings Were Calculated for Each Competition

How Fixed Costs Were Determined

Tab C - Alignment of Competitive Sourcing and Human Capital

[SOCIAL SECURITY]{.underline}

The Commissioner

December 22,2004

The Honorable Tom Harkin United States Senate Washington, D.C. 20510

Dear Senator Harkin:

The purpose of this letter is to transmit to you the Social Security
Administration\'s (SSA) Report to Congress on Fiscal Year (FY) 2004
Competitive Sourcing Efforts as required by the Consolidated
Appropriations Act of Fiscal Year 2004. The report has been prepared in
accordance with the Office of Management and Budget\'s (OMB) guidelines.

The FY 2004 OMB guidance adds several new elements to the FY 2003
instructions to improve the usefulness of the data collected. Included
in this year\'s report are competitive sourcing activities that have
been completed in FY 2004, achieved cost savings and/or quantifiable
performance improvements on competitions completed in FY 2003, and fixed
costs for FY 2004.

SSA continues to be focused on results that create more efficient
functions within the Agency, generate cost savings and improve
performance. In FY 2004, SSA completed two competitive sourcing
competitions involving a total of 77 full time equivalents (FTE). One of
those competitions, the Systems Help Desk competition resulted in an
Agency win with a cost lower than baseline cost by \$35,364,000, over
the five year performance period. This competition enabled the Agency to
place FTEs in areas of need, allowing SSA to better serve the American
public.

Through a measured, consistent approach to competitive sourcing, SSA is
continuing its efforts in becoming a \"most efficient organization\" in
order to provide better service to the American public.

If there are any questions concerning the report, your staff may contact
Myrtle S.. Habersham, Chief Strategic Officer at 410-965-7401.

Enclosures:

Tab A - FY 2004 Competitive Sourcing Activities Summary

Tab B - Narrative Statements on:

Projected Number of FTEs Scheduled for Competition in FY 2005 How
Savings Were Calculated for Each Competition

How Fixed Costs Were Determined

Tab C - Alignment of Competitive Sourcing and Human Capital

[SOCIAL SECURITY]{.underline}

The Commissioner

December 22,2004

The Honorable Arlen Specter

Chairman, Subcommittee on Labor, Health and Human Services and Education
Committee on Appropriations

United States Senate

Washington, D.C. 20510

Dear Mr. Chairman:

The purpose of this letter is to transmit to you the Social Security
Administration\'s (SSA) Report to Congress on Fiscal Year (FY) 2004
Competitive Sourcing Efforts as required by the Consolidated
Appropriations Act of Fiscal Year 2004. The report has been prepared in
accordance with the Office of Management and Budget\'s (OMB) guidelines.

The FY 2004 OMB guidance adds several new elements to the FY 2003
instructions to improve the usefulness of the data collected. Included
in this year\'s report are competitive sourcing activities that have
been completed in FY 2004, achieved cost savings and/or quantifiable
performance improvements on competitions completed in FY 2003, and fixed
costs for FY 2004.

SSA continues to be focused on results that create more efficient
functions within the Agency, generate cost savings and improve
performance. In FY 2004, SSA completed two competitive sourcing
competitions involving a total of 77 full time equivalents (FTE). One of
those competitions, the Systems Help Desk competition resulted in an
Agency win with a cost lower than baseline cost by \$35,364,000, over
the five year performance period. This competition enabled the Agency to
place FTEs in areas of need, allowing SSA to better serve the American
public.

Through a measured, consistent approach to competitive sourcing, SSA is
continuing its efforts in becoming a \"most efficient organization\" in
order to provide better service to the American public.

If there are any questions concerning the report, your staff may contact
Myrtle S.. Habersham, Chief Strategic Officer at 410-965-7401.

Enclosures:

Tab A - FY 2004 Competitive Sourcing Activities Summary

Tab B - Narrative Statements on:

Projected Number of FTEs Scheduled for Competition in FY 2005 How
Savings Were Calculated for Each Competition

How Fixed Costs Were Determined

Tab C - Alignment of Competitive Sourcing and Human Capital

**Narrative Statements**

**[Total Projected Number of Full-time Equivalents Scheduled for
Competition]{.underline} [in Fiscal Year 2005]{.underline}**

The Social Security Administration estimates that approximately 343
full-time equivalent (FTEs) will be scheduled for competition in Fiscal
Year 2005 based on the Green Plan sent to OMB on September 29, 2004. SSA
will conduct these competitions in FY 2005, if **sufficient funds are
available.**

**[Savings Calculations]{.underline}**

In accordance with the OMB Report to Congress guidance, SSA will
identify estimated savings by determining the cost of performing the
function prior to announcement (baseline cost). When the study is
announced COMPARE software will be used to develop the baseline cost
estimate. Savings are calculated by subtracting the winning bid offer
(i.e. the Agency tender or the private sector bid) from the baseline
cost.

SSA believes that service improvements realized from competitions will
allow components to increase productivity/accuracy/service to the
public. Components will report annually on these types of improvements
based on the performance standards identified in the performance work
statement.

**[Fixed Cost Calculation Methodology]{.underline}**

In accordance with the OMB Report to Congress guidance, fixed costs
represent the cost of a fully dedicated staff associated with providing
central direction and oversight of the Agency\'s competitive sourcing
program.

The Agency\'s fixed costs include:

· General support contractor costs for developing SSA\'s competitive
sourcing guides and the Competitive Sourcing Tracking System, consulting
on A-76 guidance, assisting in developing lessons learned, providing
general competitive sourcing training and non-competition related
services, etc.

· The FTE cost of full-time dedicated staff, including fringe benefits
and overhead, associated with providing central direction and oversight
of SSA\'s competitive sourcing program (i.e., Office of Competitive
Sourcing staff and Office of Acquisition and Grants Contracting Officer
for competitive sourcing).

· **Alignment of Competitive Sourcing and Human Capital**

One of the ways the Agency has strengthened the needed infrastructure
for competitions is the use of a cross-component Competitive Sourcing
Workgroup. Representatives from the Office of Human Resource (OHR) are
active participants along with representatives from all of SSA\'s
components. The workgroup supports SSA\'s competitive sourcing effort in
a variety of ways such as assisting in the development of the FAIR Act
Inventory, updating lessons learned, developing competitive sourcing
guidance, providing feedback on OMB guidance, and serving as a link to
Agency components in the area of competitive sourcing.

OHR has assigned members of its various staffs to work with the
employees conducting and/or affected by studies that are either planned
or underway. OHR helps to identify and address skills imbalances,
competency gaps and organizational redundancies that may affect either
the proposed or the actual study. For instance, career counselors have
worked with staff in areas that are under study to identify and schedule
general skills training and personnel specialists have helped to
identify methods for creating organizations in areas that are under
study which will more effectively and efficiently deliver the services
that are being studied.

On an agency-wide scale, OHR has been actively working for many years to
identify and properly plan for the influence that the impending
retirement wave will have on its ability to deliver services. The
primary document that captures this effort is the \"Retirement Wave
Analysis.\" First done in 1998, this analysis has been updated every 3
years since, and we are now moving to annual updates.

\"The Retirement Wave Analysis\" helps SSA to identify potential skills
imbalances and competency gaps, with an eye towards helping Agency
executives address these before they actually occur. In preparing this
document, which is shared with all SSA components, including the Office
of Competitive Sourcing (OCS), we are always aware that competitive
sourcing is one of the approaches that should be considered when
determining how best to address these losses.

We monitor SSA success in addressing the potential problems identified
in the \"Retirement Wave Analysis\" via the \"Future Workforce
Transition Plan (FWTP).\" This document contains a number of specific
activities that have been identified as necessary to stay ahead of the
potentially negative impacts of the retirement wave. The \"FWTP\" is
updated quarterly and reflects, among other information,
reorganization/restructuring activities, skills gaps analyses, training
and competitive sourcing activities. Again, this document is shared with
the OCS.

Finally, OHR has developed a \"Human Capital Plan (HCP)\" in support of
the President\'s Management Agenda item on the Strategic Management of
Human Capital. The \"HCP,\" which has also been shared with OCS, is
aligned with the Agency Strategic Plan. It indicates that the Agency is
using competitive sourcing studies to examine various methods for
providing high-quality, citizen centered service.

The \"HCP\" includes SSA\'s \"Competitive Sourcing Human Resources
Plan,^\"^ which outlines alternatives for employees who are displaced as
a result of competitive sourcing such as the use of career counselors to
provide guidance in establishing a new career. It also includes SSA\'s

\"Labor Relations Strategy for Competitive Sourcing,\" which addresses
possible strategies for meeting the labor relations obligations arising
from competitive sourcing. These items are addressed in the Workforce
Planning and in the Strategic Alignment sections of our \"HCP.\"

**Alignment of Competitive Sourcing and Human Capital**

One of the ways the Agency has strengthened the needed infrastructure
for competitions is the use of a cross-component Competitive Sourcing
Workgroup. Representatives from the Office of Human Resource (OHR) are
active participants along with representatives from all of SSA\'s
components. The workgroup supports SSA\'s competitive sourcing effort in
a variety of ways such as assisting in the development of the FAIR Act
Inventory, updating lessons learned, developing competitive sourcing
guidance, providing feedback on OMB guidance, and serving as a link to
Agency components in the area of competitive sourcing.

OHR has assigned members of its various staffs to work with the
employees conducting and/or affected by studies that are either planned
or underway. OHR helps to identify and address skills imbalances,
competency gaps and organizational redundancies that may affect either
the proposed or the actual study. For instance, career counselors have
worked with staff in areas that are under study to identify and schedule
general skills training and personnel specialists have helped to
identify methods for creating organizations in areas that are under
study which will more effectively and efficiently deliver the services
that are being studied.

On an agency-wide scale, OHR has been actively working for many years to
identify and properly plan for the influence that the impending
retirement wave will have on its ability to deliver services. The
primary document that captures this *effort *is the \"Retirement Wave
Analysis.\" First done in 1998, this analysis has been updated every 3
years since, and we are now moving to annual updates.

\"The Retirement Wave Analysis\" helps SSA to identify potential skills
imbalances and competency gaps, with an eye towards helping Agency
executives address these before they actually occur. In preparing this
document, which is shared with all SSA components, including the Office
of Competitive Sourcing (OCS), we are always aware that competitive
sourcing is one of the approaches that should be considered when
determining how best to address these losses.

We monitor SSA success in addressing the potential problems identified
in the \"Retirement Wave Analysis\" via the \"Future Workforce
Transition Plan (FWTP).\" This document contains a number of specific
activities that have been identified as necessary to stay ahead of the
potentially negative impacts of the retirement wave. The \"FWTP\" is
updated quarterly and reflects, among other information,
reorganization/restructuring activities, skills gaps analyses, training
and competitive sourcing activities. Again, this document is shared with
the OCS.

Finally, OHR has developed a \"Human Capital Plan (HCP)\" in support of
the President\'s Management Agenda item on the Strategic Management of
Human Capital. The \"HCP,\" which has also been shared with OCS, is
aligned with the Agency Strategic Plan. It indicates that the Agency is
using competitive sourcing studies to examine various methods for
providing high-quality, citizen centered service.

The \"HCP\" includes SSA\'s \"Competitive Sourcing Human Resources
Plan,\" which outlines alternatives for employees who are displaced as a
result of competitive sourcing such as the use of career counselors to
provide guidance in establishing a new career. It also includes SSA\'s

\"Labor Relations Strategy for Competitive Sourcing,\" which addresses
possible strategies for meeting the labor relations obligations arising
from competitive sourcing. These items are addressed in the Workforce
Planning and in the Strategic Alignment sections of our \"HCP.\"