You might think that privatizing federal jobs is one thing the Bush administration, in its zeal for shrinking government, would get right. Think again.

According to a recent report by a House appropriations subcommittee, the U.S. Forest Service spent more than $23 million in fiscal 2002 and 2003 on an outsourcing program that eliminated exactly 16 maintenance jobs. Program managers also claimed to have "saved" taxpayers a grand total of $5 million -- all of it by hiring a private company to run a computer help desk.

This is hardly the only picture of failure and foolishness resulting from the president's Competitive Sourcing Initiative (CSI), which requires all federal agencies to accelerate their cost-benefit studies, called "competitions," on jobs that have been deemed "commercial," or appropriate for private-sector contracts. Indeed, the White House Office of Management and Budget's own figures for all CSI competitions undertaken in fiscal 2003 -- at a cost of $88 million -- show that public employees proved to be better and cheaper than private contractors in nine cases out of 10.

But the Forest Service experience is a particularly well-documented example -- and since the documentation was done under Republican supervision, it's immune from characterization as a politically motivated attack by the president's enemies. Among the findings:

• Under an OMB directive that each agency study 15 percent of its jobs by the end of 2003, the Forest Service examined slightly more than 3,000 of its 35,000 positions, primarily in maintenance, computer support, Job Corps centers and public-comment analysis. Because it had no guidelines from OMB about which jobs should be considered inherently governmental, and therefore off-limits to CSI, the Forest Service treated all jobs as eligible.

• This resulted in 169 studies, of which only eight determined that work could be outsourced at a savings -- and in five of those cases, no private employer was willing to bid for a contract. Partly that reflects the nature of the Forest Service, which scatters employees in small numbers over vast and largely rural areas. (Nearly half the studies involved work units of three people or fewer; one examined a single part-time maintenance job.)

• In 20 cases, it would have cost the Forest Service more to administer a private-service contract than it would have paid the contractor. In one region, studies determined that maintenance work budgeted at $9 million might cost $634 million if privatized.

• Because CSI is a classic unfunded mandate -- agencies get no extra money for all this analysis and study -- the Forest Service paid for its program by raiding budgets for firefighting, recreational facilities and other programs that deliver direct benefits to taxpayers.

• Although Congress has limited the Forest Service to spending no more than $5 million on CSI work in fiscal 2004, it will probably spend much more because the cap doesn't apply to salaries, overhead and various indirect costs that aren't tied to a particular study. These greatly outweigh the fees for consultants, travel, training and other incremental items that are subject to the cap.

It must be noted that privatizing essentially commercial jobs in federal agencies was not a new idea put forward by George W. Bush. Indeed, a 1998 law required agencies to do essentially the same things as CSI -- but without the arbitrary targets and timetables imposed by Bush's OMB, which claimed that 50 percent of federal jobs could be privatized, for billions in savings.

The House panel found that the pressure of those directives prompted Forest Service managers to make decisions that undercut the CSI objectives -- sometimes to get the work done quickly and sometimes, perhaps, out of spite. This should surprise no one who has worked in a modern organization, public or private, and has seen what happens when the boss issues a flashy but ridiculous directive -- then shows no real interest in seeing it followed in good faith.

© 2004 Star Tribune.

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