Section One: An Overview of Competitive Sourcing

General Background of Competitive Sourcing

1. What is Competitive Sourcing?

Competitive Sourcing is a process to determine the most cost effective method of obtaining services that are available in the private sector. It involves a competition between a Government workforce and commercial sources. The process is defined in the Office of Management and Budget (OMB) Circular A-76. When a function has been selected to undergo a Competitive Sourcing study, it does not mean the function has been predetermined to be contracted out -- rather it means that the function will be subject to a cost comparison, and only the result of the cost comparison can dictate whether the function will be retained in-house and continue to be performed by Government personnel or whether the function will be performed by a commercial vendor.

2. What are the guiding principles behind Competitive Sourcing?

It is the policy of the United States Government to rely on commercially available sources to provide commercial products and services. The Government is obligated to provide its services at the least cost to the taxpayer. One method of obtaining high quality and low cost is by subjecting a service to competition. Competition enhances quality, economy, and productivity. Not only does Competitive Sourcing aim to achieve higher quality and lower cost through competition, but it also offers Federal employees an opportunity to retain responsibility for providing a commercial service. Prior to the establishment of the A-76 Competitive Sourcing process, the Government was not required to offer this opportunity to its Federal employees and had every right to directly outsource its commercial services to industry sources.*

3. What are the guiding policies and directives of Competitive Sourcing*?

The following are the primary policies and directives that establish the Government�s guidance on Competitive Sourcing:

• The President�s Management Agenda of 2001 -- mandates that civilian and defense agencies pursue the Competitive Sourcing process on a government wide basis
   

• Federal Activities Inventory Reform (FAIR) Act of 1998 -- requires all Government agencies to submit an annual inventory of commercial activities
   

• Office of Federal Procurement Policy (OFPP) Letter 92-1 (September 23, 1992)-- specifically defines Inherently Governmental (IG) activities
   

• OMB Circular A-76 and Supplemental Handbook (last revised in 1999) -- describes the cost comparison process and procedures for implementing Competitive Sourcing
   

• FAA�s Implementation of Competitive Sourcing -- will describe specific procedures for implementing the Competitive Sourcing process within FAA organizations (currently under development)

4. How is Competitive Sourcing different from Privatization?

Privatization occurs when the Government relinquishes ownership and control of an operation by divesting itself of the commercial activity, including the associated real property, and becomes a customer that purchases goods and services from a commercial source. In Competitive Sourcing, the Government retains ownership and control of an operation whether government employees or contractors provide the service.

Federal Activities Inventory Reform (FAIR) Act

5. What is the Federal Activities Inventory Reform (FAIR) Act of 1998*?

Public Law 105-270, the Federal Activities Inventory Reform Act of 1998, requires that all Government agencies review, annually, the functions that its employees perform. Each agency is required to identify those functions that must be performed by Government employees and those functions that are considered to be commercial activities. Further, each agency is required to submit its list (officially called its "Inventory") of commercial activities to OMB each year. Following review by OMB, the FAIR Act inventory is transmitted to Congress and released to the public.

6. What is the relationship between the FAIR Act inventory and Competitive Sourcing?

All functions that are judged to be commercial in nature for the FAIR Act inventory may be subject to Competitive Sourcing.

7. When will the FAA�s 2002 FAIR Act inventory be available?

The FAA�s final 2002 FAIR Act inventory is scheduled for release in early 2003, following the agency�s response to comments and OMB review.

8. Is there a method for challenging an agency�s FAIR Act inventory*?

Yes. The contents of the inventory are subject to challenge and appeal by the public and by government employees and unions. Section 3 of the FAIR Act established a two-tiered administrative challenge and possible appeals process that permits interested parties to challenge the inclusion or the omission of an activity from the FAIR Act inventory. Section 3(b) of the FAIR Act defines "interested party" in more detail.

The Competitive Sourcing Process

9. What is the basic process for conducting a Competitive Sourcing study*?

A Competitive Sourcing process should begin with a Planning Phase that should result in a clear understanding of the scope of services that will be subjected to competition. Also, during this phase, other planning documents should be prepared to ensure that the study is successful. Once an announcement is made to affected employees that their function is being subjected to Competitive Sourcing, the Acquisition Phase can commence. The key product that is developed during the Acquisition Phase is a Performance Work Statement (PWS) that specifies the requirements of the scope of services subject to competition. The PWS is rolled into a solicitation and this is the document that commercial offerors use to formulate a proposal. Meanwhile, a Management Study Phase is underway, during which a Government team develops a Most Efficient Organization (MEO), representing the Government in-house workforce. Both the MEO and commercial offeror proposals must be based upon the same PWS. Under current A-76 rules, a single offeror will be selected during the Acquisition phase, and this offeror�s bid will be compared to the cost of the MEO. Following a challenge period, a final decision will be reached regarding whether the service will continue to be performed by Federal employees, or whether a commercial vendor will supply the workforce.

10. What are the products of the Planning Phase*? (do we need this Q&A?)

Once a commercial activity has been identified by an agency to be a candidate for Competitive Sourcing, there are a number of planning documents that should be prepared. The FAA has completed or is in the process of completing all of these documents for the AFSS study.

• A validation of the FAIR Act inventory for the function may be required to check the currency and accuracy of the activities deemed to be commercial in nature or inherently governmental.
   

• An agency may wish to conduct a Feasibility Study to determine whether there are any reasons why a proposed function cannot be subjected to competition, such as a lack of industry interest or capability.
   

• As frequent and accurate communication is one of the most important aspects of a successful Competitive Sourcing effort, a Communications Plan is essential to facilitating good communication. The Communications Plan should describe audiences, topics, timing of communication, and methods of communication.
   

• An initial Action Plan is necessary to prescribe the Competitive Sourcing study milestones, roles and responsibilities of the various teams, a schedule of events and other pertinent information. The Action Plan is a working document that should be modified as necessary.

11. What are the products of the Acquisition Phase*?

The following are the primary products that are developed as part of the Acquisition Phase:

• Performance Work Statement (PWS) -- The PWS is the foundation of the Competitive Sourcing study. It serves as the scope of work detailing all the requirements that will be subject to competition. It is written at a performance-oriented level so as not to be too prescriptive which would run the risk of limiting innovation. Both the in-house workforce and the commercial offerors will prepare technical and cost proposals based upon the same PWS. The PWS will include work to be performed, quantity of work units, performance standards, and other requirements. Alternatively, a PWS is sometimes referred to as a Performance Requirements Document (PRD).
   

• Performance Requirements Summary (PRS) -- The PRS is a synopsis of the scope of work identifying those tasks considered critical to accomplishment of the Agency�s mission along with expected standards of performance and methods of surveillance. Usually, the PRS is a part of the PWS, either as an exhibit or embedded throughout the PWS.
   

• Quality Assurance Surveillance Plan (QASP) -- The QASP contains sampling guides, checklists, and decision tables that details the method by which Quality Assurance Evaluators (QAEs) will observe and inspect in-house or contract performance to monitor how well standards of the PWS are met.
   

• Acquisition Plan -- This plan provides details of the entire procurement action.
   

• Solicitation -- This is the complete document that the in-house workforce and the commercial offerors respond to for their respective bids. The PWS is only Section C of the entire solicitation. Other sections of the solicitation include a bid schedule, instructions to bidders, evaluation factors, etc.
   

• Source Selection Evaluation Plan -- This plan provides guidance to the Source Selection Evaluation Board (SSEB) on how they will evaluate private sector proposals.

12. What are the products of the Management Study Phase*?

The following are the primary products that are typically developed by the Management Study team. Taken together, these products make up the Government�s Management Plan.

• Most Efficient Organization (MEO) -- The MEO is the Government�s proposed new in-house organization designed to perform the tasks identified in the PWS in the most efficient manner possible. The MEO is the basis for the In-House Cost Estimate (IHCE) that will be compared to a private sector bid.
   

• Residual Organization (RO) -- The RO depicts the organization designed to accomplish the inherently governmental duties and other exempt duties that fall outside the scope of the PWS. Government oversight and contract administration are examples of functions that would be performed by the RO. The RO will have direct interaction with the MEO or Contractor service provider. Alternatively, the RO is sometimes referred to as the Continuing Government Activity (CGA).
   

• Technical Performance Plan (TPP) -- The TPP explains how the MEO will accomplish the PWS requirements. It may describe some of the new innovations the MEO will employ to achieve greater efficiency or effectiveness. It is equivalent to the Contractor�s technical proposal. It is prepared in accordance with the requirements in Section L of the solicitation.
   

• In-House Cost Estimate (IHCE) -- The IHCE or "in-house bid" is based upon the Most Efficient Organization. The IHCE will be compared to the private sector bid.
   

• Transition Plan (TP) -- The TP is a plan for the transition from the current organization to the MEO or contract/ISSA performance. It is designed to minimize service disruptions, adverse impacts, and address the capitalization and startup requirements.

13. What is an Independent Review (IR)*?

The IR is a review of the MEO, TPP, and cost estimate by an agency official separate from and independent of the function under study to certify compliance with the requirements of OMB Circular A-76 and its Supplemental Handbook. The IR is led by an Independent Review Officer (IRO) and begins as soon as the Management Plan is complete. IRs typically require 30 to 90 days to complete.

14. Who performs Competitive Sourcing?

Every department of the federal government is responsible for implementing the President�s Management Agenda in a timely manner. The OMB periodically issues an Executive Branch Management Scorecard available at their website, www.omb.gov, which provides each department a red, yellow, or green rating, directly correlating to their progress in a number of initiatives, including Competitive Sourcing.

15. What study methods are used to implement the Competitive Sourcing process*?

OMB Circular A-76 describes the following three study methodologies:

• Full Cost Comparison - In a full cost comparison, a PWS and solicitation are designed and issued as a Request for Proposal (RFP). While the private sector offerors prepare their bids, the Government�s Management Study team is re-engineering an organization of in-house personnel to design a Most Efficient Organization (MEO). A single private sector offeror is selected and will be compared to the Government�s MEO cost. A full cost comparison can take 18 to 36 months.
   

• Streamlined Study -- In the streamlined study process the current Government organization performing the work is compared against the private sector. Essentially, the Agency conducting the study finds four (4) current Federal contracts that are similar in size and scope to the work being performed by the organization under the A-76 study. After some leveling to ensure that an "apples to apples" comparison is conducted, the Government�s cost of performing the work under study is compared with the highest priced contract. If the Government performs the work at a lower cost, the work is retained in house, if not, the work is slated to be outsourced and a procurement action begins. OMB Circular A-76 stipulates that these studies can only be conducted when there are 65 or fewer full time equivalents (FTEs) in a function under study. A streamlined study can take 6-18 months.
   

• Direct Conversion -- Unlike the Full Cost Comparison or Streamlined approaches, Direct Conversion transfers work to the private sector to perform. Direct Conversion can occur if a function has 10 or fewer FTEs. A Direct Conversion can take 4-8 months.

16. How will emergency situations that require unique roles and responsibilities be incorporated into the PWS?

The PWS Development team will work with the Contracting Officer to put surge requirements in the PWS. These requirements state that if there is a dramatic increase in workload the bidder will need to demonstrate in its proposal that they have surge capabilities and must explain what they are and how they would react. The FAA will evaluate them on this capability in the Source Selection process. The ability to adapt to unique work requirements such as performing additional tasks will also be assessed.

17. What team structures typically exist to facilitate the Competitive Sourcing study process and what roles do each team typically play*?

The following team structures are typical:

• PWS Team -- This PWS Team�s responsibility is to document the requirements necessary to issue a solicitation. This team develops the PWS and the Quality Assurance Surveillance Plan. This team may also be asked to prepare other procurement documents such as the Acquisition Plan, Source Selection Evaluation Plan, other parts of the solicitation, etc.
   

• Management Study Team -- The Management Study Team is charged with restructuring the current Government organization to develop a Most Efficient Organization that adheres to the requirements in the PWS. This team develops the MEO, the In-House Cost Estimate (IHCE), the Technical Performance Plan (TPP), and the Transition Plan (TP). This team may also be asked to design a proposed Residual Organization (RO).
   

• Executive Steering Group -- Generally this group is comprised of executive managers that are responsible for the organization. They provide high-level guidance as well as establish agency policy.
   

• Independent Review Team -- The IR Team evaluates the accuracy and completeness of the Management Plan. This team will check for errors and for compliance with OMB Circular A-76. The IR Team needs to assure that the MEO can in fact meet the requirements of the PWS.
   

• Source Selection Evaluation Board (SSEB) -- The SSEB plays an important role at the end of the study process. The board evaluates all private sector proposals for cost and technical competency. The SSEB may make a recommendation to the Source Selection Authority (SSA) as to which private sector offeror should be selected.

18. What sections are contained within a PWS?

The PWS is comprised of six main sections and attachments. Below is a general description of each of these sections.

• General Information -- This section provides the scope of the work, operating conditions, quality assurance requirements, and other general requirements.
   

• Definitions and Acronyms - This section provides a comprehensive list of important definitions and acronyms used throughout the solicitation.
   

• Government Furnished Property and Services - This section provides a description of the items that will be provided by the Government.
   

• Service Provider Furnished Property - This section describes what the Service Provider will need to provide in order to perform the PWS requirements.
   

• Specific Task Requirements - This section describes the specific task requirements, workload and performance standards of the function under study. It is the heart of the PWS.
   

• Applicable Directives and Regulations - This section provides a list of existing rules and regulations that govern the performance of the PWS requirements regardless of who wins the competition.

19. Can a specific task or function originally classified as commercial in nature become inherently governmental?

Yes. Based on additional data collection and analysis conducted during PWS development, an activity originally classified as commercial in nature can be reclassified as inherently governmental. Similarly, inherently governmental activities could be reclassified as commercial in nature if new information becomes available to support such a change.

20. How will detailed processes and procedures be taken into account in the PWS?

The PWS will be written in a performance-based format, meaning that the Government is more concerned with the outcome of a particular requirement rather than how the service provider performs the work to achieve that outcome. Performance-based contracts allow for as much innovation as possible which ultimately should lead to cost savings for the Government. With this in mind however, there are times when a certain process or procedure must be followed for reasons such as safety, enforcement, or security. There are different approaches to developing this kind of requirement. Sometimes, the requirement will state that the service provider shall perform the function in strict accordance with a particular regulation or order.

21. What will the team structure be for data collection during the PWS phase?

The PWS Team will include a program manager, contracting officer, legal representative, subject matter experts, union representation, and consultant support. In addition, a number of individuals will be asked to contribute specific knowledge for both drafting and reviewing aspects of the PWS.

22. What is the timeline for an A-76 study*?

The OMB Circular A-76 Handbook (part I, chapter 3, paragraph A4) states that cost comparisons should be completed within 18 months for a single activity or 36 months for multiple activities. This period of time begins with the public announcement and ends with the tentative decision. Following the tentative decision will be an administrative appeals period, a final decision, and a transition to a new organization (either an MEO or Contractor service provider). These events can take anywhere from 6 to 18 additional months after the tentative decision.

23. Who is the Administrative Appeals Authority (AAA)*?

In the FAA, the Assistant Administrator for Financial Services maintains the authority to hear appeals to the results of the Competitive Sourcing process.

24. What are the grounds for the affected workforce to appeal*?

The affected workforce, like all affected parties can appeal the tentative decision. The appeal should demonstrate how aspects of the process lack substantial evidence, or are otherwise arbitrary and capricious.

Section Two: FAA and the A-76 Process

FAA Action on Competitive Sourcing

25. How many Competitive Sourcing studies within the FAA have been completed?

FAA has not conducted any full Competitive Sourcing studies in accordance with OMB Circular A-76 as it was revised to include the provisions of the FAIR Act of 1998. In the past, the agency has conducted some smaller localized studies of functions such as academy training and computer room operations at the Mike Monroney Aeronautical Center.

26. How many FAA Competitive Sourcing projects are planned or on going?

The AFSS Competitive Sourcing study is the first and currently the only FAA Competitive Sourcing study in the recent past. Other possible studies may be identified during our review of the 2002 FAIR Act Inventory of Commercial Activities with the appropriate program offices.

27. Where can more information be obtained on the status of on-going studies?

The Competitive Sourcing program managers are planning to establish an Internet web site to post general information about the OMB A-76 Competitive Sourcing process and the status of FAA studies. This web site will link to specific study web sites for additional details and other government web sites for more general information.

28. Why did the FAA propose AFSS to be studied?

An Office of Inspector General for Aviation Report recommended consolidation of FSSs in conjunction with OASIS deployment citing the likelihood of significant savings. The following assessments supported the recommendation:

• FSS functions are severable and distinct, and can therefore be separated for study
   

• Productivity and unit cost per operation vary greatly between flight service locations
   

• The FSS function provides an opportunity for efficiency gains through the Competitive Sourcing process such as:
   

  • Potential consolidation of facilities
     

  • Reduction of non-value added activities

29. How many full-time equivalents (FTEs) are being affected by the Competitive Sourcing study of AFSS?

The current estimate of staffing at the stations under study is just under 3000. This includes trainees, journeymen, supervisors, managers and administrative staff. Other staff such as field maintenance and regional headquarters personnel may be impacted.

30. Why was Alaska excluded from the AFSS Competitive Sourcing Study Process?

Because of the complex nature of studying the FSS function as a whole, FAA management decided to separately study Alaska at a later date due to the unique environmental factors within the state, requiring unique systems and understanding of local topography.

31. How will support consultants assist the FAA in Competitive Sourcing?

Competitive Sourcing is a complex and relatively new process for civilian agencies. Support consultants will work directly with members of the FAA Competitive Sourcing teams in providing process-orientation, lessons learned, and best practices based on previous Competitive Sourcing experience. In addition, support consultants are anticipated to assist in the development of all work products, helping to incorporate the functional expertise of FAA employees of all levels. In order to avoid conflict of interest problems, contractor support will occur with strict adherence to the same firewall regulations with which the FAA and Union representation must comply.

The Effect on Current Operations and Initiatives

32. How are employees notified of the final decision*?

The FAA has not determined, as of yet, how the announcement will be made.

33. How much time exists between a tentative decision to go contract before employees come off the government payrolls?

A transition plan for conversion to MEO or contract is being developed. Transition timelines have not been determined yet.

34. Should FAA stop current initiatives focused around performance improvement and innovation?

No. Continuous improvement of all AFSS functions and processes is encouraged. Implementing even small innovations suggested by employees can often build momentum for additional ideas. Some innovations may be used in the development of the Most Efficient Organization (MEO). However, employees should be cautious about "advertising" such innovations, for the MEO could be placed at a disadvantage for the cost comparison should potential offerors learn of these innovations.

35. If the MEO wins, is the current bargaining contract affected?

The FAA is unaware of any instances in the Federal sector where collective bargaining rights were abrogated as a result of the Governmental MEO's successful competition in the A-76 process. The FAA has no expectation that the rules and regulations would have any different outcome for the FAA.

Workforce/Customer Involvement and Participation

36. How can the workforce participate in the Competitive Sourcing Process?

The workforce can actively participate in PWS development by providing input for workload data and reviewing requirements for accuracy and clarity. Employees can also contribute time estimates and ideas for improvement toward MEO development. Members of the workforce cannot participate in the development of final A-76 products, nor can they make final decisions on the MEO because it is a management document.

37. What is "Right of First Refusal" (ROFR)?

Right of First Refusal (ROFR) requires a winning contractor to give adversely affected or separated government employees right of first refusal for employment openings created by the award of the contract and for which they are qualified. The employment must be consistent with post-government employment conflict of interest standards. ROFR applies to all affected employees to include those "bumped" by a reduction in force (RIF).

38. If the Contractor wins the bid, will the Contractor hire me and will it be at my current rate?

Federal Acquisition Regulation clause (FAR 52.207-3), entitled Right of First Refusal of Employment states "The Contractor shall give Government employees who have been or will be adversely affected or separated as a result of award of this contract the right of first refusal for employment openings under the contract in positions for which they are qualified." While this does not require the Contractor to hire any government employee, it prohibits the Contractor from hiring anyone else without first offering vacant positions to qualified displaced Government employees. Having said this, the Contractor is not obligated to ensure employment. If a Contractor hires you, they are not obligated to guarantee any specified length of employment or any pay rate that may be comparable to your present salary. These issues will be negotiated between the contractor and each individual it hires. While FAA�s AMS is exempt from FAR coverage, as a matter of policy, the guidance cited above from FAR 52.207-3 will be followed by the agency.

39. If an employee wishes to waive his or her right of first refusal, does that change his or her potential level of participation in the study process?

The Right of First Refusal will be granted to all adversely affected employees, including Union representatives. While determination of allowable level of participation is the discretion of FAA management, any employee in danger of losing his or her ROFR due to level of participation in the Competitive Sourcing process will be notified in writing.

40. How do firewall boundaries affect an employee�s ability to participate?

All regular participants of the Competitive Sourcing study will be subject to firewall boundaries to prevent against a conflict of interest. Firewall boundaries dictate that personnel cannot participate in the development of work products for both the acquisition and Management Study Teams. Such firewall boundaries assure that no one party gains an unfair competitive advantage, thereby tainting the entire process.

41. How will NAATS be directly involved in the Competitive Sourcing study?

NAATS representatives will be able to review and provide input to working drafts of planning documents. Throughout the Competitive Sourcing study, NAATS will be an active contributing member of the communications sub-group, helping to organize and disseminate the status of the Competitive Sourcing study and address the questions and concerns of employees. NAATS will have an opportunity to be represented on both the PWS and Management Study teams; however, different individuals must represent each team and adhere to firewall boundaries.

42. Will our customers be involved in the process?

Customer input will be sought during a number of phases of the Competitive Sourcing study. In the development of the PWS and MEO, customers will be solicited to obtain their views and expectations on the services to be provided. Specific methodologies for customer feedback will be defined during the study.

Human Resources Issues and Concerns

43. What aspects of Competitive Sourcing deal with labor laws?

The Competitive Sourcing process as specified in OMB Circular A-76 does not deal primarily with labor laws. Rather, labor laws inherent to the contracting process are followed in a manner similar to other procurement scenarios. AMS policies and procedures detail how and in what context the Service Contract Act (SCA) applies to procurement of services.

44. If the Government wins the study will all employees keep their jobs?

If the MEO calls for less than the current number of positions to perform a function, reductions will be handled in accordance with the FAA's policies and procedures governing Staffing Adjustments and Reduction-in-Force (http://www.faa.gov/ahr/policy/order/orders/33502c.cfm). This order, 3350.2C, provides that when the number of employees in any organization or occupation must be reduced, management shall make every reasonable effort to place surplus employees in other jobs or regions of the agency with the least possible interruption to their careers and personal lives. Separation of employees by RIF shall take place only after all reasonable alternative actions have failed to solve the surplus problem.

45. How many employees will be separated as a result of a private sector win?

It is impossible to project the number of employees who will be separated as a result of outsourcing. As outlined in the previous question, the FAA management will make every reasonable effort to minimize the number of employees who will be separated.

46. If the Contractor wins the bid or the MEO does not provide employees an opportunity to perform their current jobs, does the elimination of Title V restrict employee rights to find placement in another Federal job?

The FAA has an Interchange Agreement with the Office of Personnel Management (OPM), which allows a permanent FAA employee, who previously acquired career status in the competitive service, to apply for positions under a competitive service agency's Merit Promotion Plan (Internal Selection) as long as it is open to federal employees outside the agency. One's career status in the competitive service may have been earned either with the FAA (prior to its becoming an excepted service agency, April 1. 1996) or with another agency.
(http://www.faa.gov/ahr/policy/hrpm/hroi/emp/intercha.cfm).

47. What are the retirement options for an employee under the Civil Service Retirement System (CSRS) and the Federal Employee Retirement System (FERS) if his/her job is contracted out, and at what age can he or she retire without a reduction being applied to his or her retirement income?

CSRS and FERS employees may take early or discontinued service retirement at any age with 25 years service, or at age 50 with 20 years service. Optional retirement requirements are age 55 with 30 years, age 60 with 20 years, or age 62 with 5 years. However, there is a reduction of 2 percent per year for each year under age 55 for early or discontinued service retirement for CSRS employees. This reduction does not apply to FERS employees. Please note that if a FERS employee retires at the minimum retirement age plus 10 years of service option, a five percent (5%) per year reduction in annuity, for each year the employee is under age 62, will apply. Employees should contact their local HRO to discuss specific cases.

48. If an employee chooses to take a deferred annuity, is he or she eligible for severance pay?

As a career employee who has been on the rolls for at least the preceding 12 months prior to separation and is not entitled to an immediate retirement annuity as a Federal employee or member of the uniformed services, he or she is eligible for severance pay. Regardless of whether an employee elects retirement, if he or she is entitled to an immediate annuity (Discontinued Service Retirement, optional retirement or retired military), an employee is not entitled to severance pay. Employees should please contact their local HRO with specific questions about eligibility for severance pay.

49. Will affected employees receive Save Pay?

Employees who are in the FG pay plan, and are placed in a lower-grade position as a result of reduction-in-force procedures will be entitled to grade and pay retention. Grade retention means, in general, keeping one's grade and pay (increased by the full annual comparability pay adjustment) for a maximum of 2 years from the date an employee becomes entitled to grade retention. Pay retention means, in general, keeping one's pay (increased by one-half of the annual comparability pay adjustment) for an indefinite period of time from the date an employee becomes entitled to pay retention. The provisions of Order 3550.11A, Grade and Pay Retention under the Civil Service Reform Act will be used to administer the benefits to eligible employees.

50. Will employees be entitled to collect unemployment pay?

This answer varies from individual to individual. Each employee must apply for unemployment at his or her local public employment service office. That local office in accordance with state laws will determine eligibility for unemployment compensation.

51. If an employee is separated from federal service, can the employee retain their government health insurance? Will employees need to pay out of pocket to keep their previous plan?

If an employee is separated from federal service, there is an option to keep coverage under the Federal Employees Health Benefits Program for 18 months after separation date. If the separation date is due to RIF, the cost of the continued coverage is the same as if still employed. Since federal plans are partially funded by the Government, if separation is voluntary, the cost of the continued coverage is much higher. Retiring employees can retain their FEHB insurance coverage if they meet the five-year eligibility requirement.

52. Is all the time earned toward retirement and all the retirement pay accumulated by a government employee worthless if the public sector loses the bid in the CA Study? What happens to time and retirement pay earned?

Employees separating from the federal government (voluntary or involuntary) may elect to:

• Take an immediate early retirement if eligibility for discontinued service retirement or optional retirement is met (age 50 with 20 years service; any age with 25 years). This would be a monthly benefit that would start immediately.
   

• Withdraw their retirement fund if retirement eligibility above is not met.
   

• Leave their retirement money in their retirement account and withdraw at any time in the future. (If an employee is rehired under federal employment, all money in their account -past and future - is counted toward their retirement annuity.
   

• Leave their retirement money in their account until age 62 and then draw a monthly retirement benefit (they need at least five years of service credit to be eligible to do this).

Employees should contact their local HRO with questions about a specific situation.

Contract Related Questions

53. How will the current AFSS infrastructure be included in the PWS?

We have not yet determined how the current infrastructure will be captured within the PWS. We are addressing this issue as we plan for the PWS development.

54. Will OASIS and other systems still be utilized after the Competitive Sourcing process?

In the planning phase of the Competitive Sourcing study, a decision will be made as to what extent the FAA will offer government furnished systems and equipment to bidding parties; however, bidding parties have an opportunity to choose not to utilize a piece of equipment if usage is not mandated within the PWS. In such cases, the bidding party must cost out any changes to systems infrastructure and be capable of making declared systems modifications within the allotted transition time while meeting certification and training requirements.

55. How are overhead costs for contractors and the government built into the cost comparison process*?

Overhead costs are built into contractor bids in real terms. The MEO overhead cost is accounted for on Line 4 of the In-House Cost Estimate. Multiplying Line 1, including fringe, by 12 percent and entering the amount on Line 4, calculates the MEO�s overhead cost.

56. What benefit factors are considered for the contractor*?

The contractor determines the benefit factors for contractor employees. The SSEB will take this into consideration when evaluating contractor proposals. Minimum benefit requirements are provided in the applicable Service Contract Act or Davis Bacon Act wage determination; however, the contractor may choose to offer additional benefits.

57. Can another service or Federal agency bid on the commercial activity*?

Yes.

58. Are there measures in place to obligate the contractor, after the contract is awarded, to adhere to requirements that did not exist or need modification*?

Changing requirements can be addressed in several ways depending on the type of contract. Typically, for a firm-fixed price type contract, language can be added stating that the service provider is responsible for any increase in workload up to a certain percentage. If that threshold is reached, the service provider and the Government can negotiate the cost of performing the increased workload.

59. Are there costs for contract administration and are they factored in*? Where*?

Yes, contract administration costs are attributed to the contractor�s cost on Line 8 of the cost comparison form.

60. Are government benefits, which must be paid if the government wins, factored into the cost comparison process*?

Yes, Government benefits that are paid to employees are added to the in-house workforce labor costs in line 1 of the cost comparison form.

61. If work has to be re-done, does the contractor have to pay for it or does the government?

In the case of a firm fixed price contract, the contractor is responsible for reperforming unsatisfactory work at no increase in contract price. In the case of a cost reimbursement contract, the Government reimburses the contractor the cost of reperformance. If a cost contact provides for an award fee, unsatisfactory work having to be reperformed may have a negative effect on the amount of award fee paid to the contractor. The contractor must meet minimum requirements as stated in the contract.

62. How will FAA ensure the quality of service provided by a contractor or MEO?

A service provider�s performance is monitored regardless of who wins the competition. The Contracting Officer maintains primary responsibility for assuring service quality expectations are met by the winning bidder. The Quality Assurance Surveillance Plan (QASP) sets in place metrics and methods of surveillance carried out by Quality Assurance evaluators. The Contracting Officer may also choose to build specific quality incentives into the contract, such as extensions based on successful accomplishment of objectives.

63. Who monitors the contractors? Will it be the supervisors who will be retained or will there be legitimate job openings for people with experience?

If the contractor wins, there are Contract Administrators (i.e. COTR) who have specific procedures for monitoring performance. Typically, Quality Assurance Evaluators (QAEs) assist the COTRs.

64. What is the performance period and will it be re-competed?

Performance periods typically are one base period with four option years. After the performance period, the function is re-competed.

65. What is in place to ensure that a contractor does not submit a low bid and then raise the price after they win?

Commonly referred to as "low balling," certain procedures are in place to ensure this type of activity does not occur. First, a well-written PWS that includes all the requirements with the appropriate performance measurements for each requirement is developed. Secondly, the evaluation criteria should be developed so that cost alone does not determine what contractor is chosen for the cost comparison with the MEO. Lastly, the source selection evaluation board will be knowledgeable enough to know whether or not a contractor is technically acceptable and the cost the contractor proposes is accurate with the PWS requirements.

66. How often does the government win decisions?

According to the GAO, Commercial Activities Panel between FY 1999 and FY 2001:

• Of the 314 cost comparison decisions made, 60% (or 187 decisions) were for the MEO, while 40% (or 127 decisions) were for the private sector service provider.
   

• Of the 26,987 positions considered for cost comparison, 51% (or 18,946 positions) stayed in-house while 49% (or 18,041 positions) were contracted out.

67. What precludes a contractor from bidding a large percentage of their workforce as part-time?

Both private sector bidders and MEOs often incorporate part-time, seasonal and intermittent positions to accomplish work that is not constant from day to day.

68. Explain the process for evaluating private sector bids to ensure that we will get a qualified contractor.

Bids/offers are subject to a rigorous evaluation process that examines the bidder�s/offeror�s capability to perform the work at the price/cost proposed. This includes an examination of the contractor�s "track record" on past contracts and financial condition. In negotiated procurements, proposals are evaluated against the source selection criteria set forth in the solicitation. Standard source selection procedures are followed, including technical evaluation, cost/price analysis, etc. In large efforts, a source selection evaluation board is normally used to evaluate proposals.

69. What if a contractor fails to perform assigned tasks?

The decision of how to manage poor/failed performance rests with the Contracting Officer. Every acquisition mechanism available still exists in the A-76/AMS process that allows the reprimanding or termination of service providers for failure to perform.