Project Location: San Diego, California
Public Sector Partner: U.S. Navy Public Works Center
Private Sector Partner: Management Analysis, Incorporated (MAI)
Contact Name: Art Smith, President, 703.506.0505, email@example.com
The U.S. Navy Public Works Center (PWC), San Diego, provides a wide array of transportation and public works support services to the Navy community in San Diego, California, as well as to other DoD and civilian agencies across the State of California. To meet this extensive mission, it maintains a workforce of over 1,600 positions, primarily skilled tradespersons. These personnel operate across five business lines: Engineering, Maintenance, Utilities, Transportation, and Environmental. The PWC is largely self-supporting, providing its services on a fee basis to its Federal customers, rather than receiving appropriated funds.
In order for the PWC to retain its customer base, this operating model places a strong emphasis on customer service and cost-effectiveness. In reflection of this, the PWC decided to perform a Competitive Sourcing study, under Office of Management and Budget (OMB) Circular A-76, of the PWC Transportation Department. The Transportation Department operates very much like a municipal transportation organization, providing refuse removal, vehicle operations and maintenance, vehicle rental, and specialized services such as airfield sweeping. The work being performed by 180 Navy employees at that time was included in this study.
OMB Circular A-76 is intended to optimize Government service provision by encouraging competition and innovation. In brief, the Circular requires:
- Analyzing a studied function to determine the services and quality actually required.
- Documenting these requirements in a performance-based solicitation.
- Soliciting private sector proposals to provide theses services.
- Reengineering the in-house organization and submitting a Government proposal based on the improved in-house organization.
- Comparing the public and private sector offers and making a decision on future service provision based on cost and quality of the proposals submitted.
Due to the complexity of the process, the PWC retained consultant support for the A-76 process from Management Analysis, Incorporated (MAI), of Vienna, VA. PWC and MAI analysts worked together in teams to ensure the completeness and accuracy of the study products.
The study process identified numerous work process improvements and staffing changes (both in numbers and grades of personnel) attainable by the in-house organization. Significant increases in productivity were identified, and the PWC’s proposal under the A-76 study was based on a staff of 150 positions (a 17 percent reduction from study start), and annual, recurring cost reduction of over $2.9 million, a reduction of nearly 30 percent versus the study start. Examples of “business” concepts introduced or revised as a result of the study include:
- Revising task completion time standards
- Revising PM Schedules
- Expanding the use of “Express Service” lanes
- Investment in new equipment
The competitive process resulted in the Navy retaining these services in-house. The reengineered PWC organization was fully in place by early 2002, and has now been performing successfully for over a year. Although the study process was difficult and complex, Competitive Sourcing served as a successful catalyst for change, yielding significant benefit for the Public Works Center, San Diego, its customers, and ultimately, the U.S. taxpayers.