The cost of outsourcing

Forest Service

The Forest Service’s controversial efforts to boost efficiency are costing millions more than they’re saving, according to figures released May 22 by two groups that represent federal employees.

Over the last few years, the agency has carried out a massive reorganization in its information technology (IT) sector by eliminating nearly 550 jobs and centralizing services, part of the Bush administration’s broader outsourcing effort throughout the Forest Service and other federal agencies. And Hank Kashdan, deputy chief for Forest Service Business Operations, says the IT changes are saving the agency $29.5 million per year. But findings released jointly by the National Federation of Federal Employees (NFFE) and Public Employees for Environmental Responsibility (PEER) show those savings are overwhelmed by an estimated $292 million in extra costs generated by the streamlining.

NFFE’s Mark Davis says the estimates are based on Forest Service data that shows in 2005 average agency employees spent 6.8 more hours per week on IT work than before reorganization. In 2006, employees spent 3.2 extra hours each week than prior to reorganization. Instead of relying on in-house employees who are computer savvy, all technical problems agency-wide are now relayed to remote IT employees via telephone and computer.

Kashdan says while there may be frustrations with the Forest Service’s IT transition, the extra costs alleged by the federal employee groups are “highly exaggerated.” He does acknowledge it’s taking significantly more time for employees to work in the new structure, but says that’s to be temporarily expected with any major reorganization.

“We’re doing some very large, large changes in how we support this organization…and the reality is these things take two or three years to operate smoothly,” Kashdan says. “We’re having a lot of operational anxiety over this right now but we have to stay the course.”

But Davis says NFFE’s data reflecting growing IT inefficiency is early evidence of problems that will only expand as competitive sourcing throughout the agency continues: “We’ve been handcuffed by the process that’s been put in place and the inefficiencies it creates are staggering.”

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