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Competitive Sourcing, Case Study Example

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Case Study

The case involving the Internal Revenue Service (IRS) in Kamensky and Morales’ book  (2006) addresses a number of subject areas; however, competitive sourcing is of particular interest, which was part of President George H.W. Bush’s agenda for the federal government during his tenure (Kamensky and Morales, 2006). Both private and public sector sources are able to compete for contracts offered by government agencies to promote resource efficiencies and lower costs (Kamensky and Morales, 2006). In the IRS case example, this highly bureaucratic government agency sought to modify some of its functionality to improve operations under the President’s change initiative (Kamensky and Morales, 2006). With this framework, the IRS would be able to streamline operations, which is a continuous compliant of many US taxpayers when trying to communicate with the IRS (Kamensky and Morales, 2006).  The IRS is infamously challenged by its own enormous size and struggles to become resourceful in its daily operations.

Competitive sourcing was introduced in several phases: 1) Using the Federal Activities Inventory Reform (FAIR) act to distinguish between government and commercial activities; 2) Using a business case analysis (BCA) to identify competing activities; and 3) Conducting preliminary planning to address performance requirements and specific tasks (Kamensky and Morales, 2006). These and other stages represent an opportunity to select the appropriate vendors who will accomplish the required tasks in a timely and efficient manner without compromising quality (Kamensky and Morales, 2006). Competitive sourcing as a key government strategy would be effective in reducing excess waste throughout federal organizations, including the IRS, (Kamensky and Morales, 2006).

Competitive sourcing with the IRS infrastructure would provide significant improvements in innovation through competitive means (Kamensky and Morales, 2006). In essence, “competitive sourcing allows government employees to compete for their jobs. The system of competition encourages a well-structured, lean reengineering by government employees who know the business and are motivated by the desire to improve performance and save jobs (Kamensky and Morales, 2006, p. 246). These conditions enabled the IRS modernize existing systems through innovation and other related factors (Kamensky and Morales, 2006). Over time, competitive sourcing will provide benefits to the taxpayer through lower costs to conduct business and a better utilization of resources across all divisions (Kamensky and Morales, 2006).

The Office of Competitive Sourcing (OCS) was assigned the task of developing and managing the competitive sourcing program and convincing employees that it was a good idea (Kamensky and Morales, 2006). Primary areas of focus included distribution, maintenance, print operations, processing, the tax law hotline, internal systems, and filing systems (Kamensky and Morales, 2006). It was necessary to provide education to employees in the event that they were separated because they did not win the bids to keep their jobs; therefore, all employee roles were taken seriously so that decisions could be made to lessen the blow of job losses (Kamensky and Morales, 2006). Therefore, public relations initiatives were sought to convince employees that this type of change was positive and beneficial (Kamensky and Morales, 2006). Competitive sourcing could be of significant advantage to the IRS; however, the agency was required to make some changes in its current practices to improve outcomes (Kamensky and Morales, 2006).

This case study is relevant because it provides further evidence that government organizations thrive on excess spending with poor services for taxpayers across agencies. The IRS is no exception to this rule and has struggled with the concept of streamlining operations in many key practice areas.  Poor service delivery runs rampant throughout the federal government and challenges the call for government agencies to minimize waste in their operations. In response to the demand for improved service delivery, the IRS and other organizations adopted President Bush’s mandate to implement competitive sourcing as a key driver in streamlining operations. This practice served as an effective means of reducing waste and improving productivity by requiring employees to essentially compete for their existing positions and to demonstrate their knowledge and wherewithal to achieve success in these positions.

Public organizations, such as government agencies, have a responsibility to the people that they serve to be as efficient and cost effective as possible. This must be a critical objective when conducting their operations so that waste is eliminated and duplication is minimized. One of the key problems with public organizations as perceived by community members is these services are typically far from efficient and are far too bureaucratic to achieve the required objectives. This is a significant concern of typical citizens and many public organizations have taken notice. However, this remains an important issue and must continue to be addressed so that these agencies are as efficient as possible. Competitive sourcing serves as an opportunity to achieve these objectives more effectively and to improve the level and skill of employees that are retained within public organizations by supporting competitions to secure available positions. This supports the gradual transformation of public agencies into leaner and more resourceful organizations which provide much-needed services to individuals and families across different communities. The IRS has learned some valuable lessons in recent years because the agency does not operate with efficiency in mind. It is necessary for the agency to take these lessons learned and to adapt to change while keep only the most qualified employees in the available positions.

 

References

Kamensky, J. M., & Morales, A. (Eds.). (2006). Competition, choice, and incentives in

government programs. Lanham, MD: Rowman & Littlefield Publishers, Inc.

 

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