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An 18-month workforce restructuring effort affecting 15 percent of employees of the Internal Revenue Service's Modernization and Information Technology Services (MITS) should be complete by September.

"We're putting this organization through more changes than any other organization I've ever seen in the federal government," said W. Todd Grams, IRS chief information officer (right). About 1,000 of the 7,000 IT workers at the agency are being affected by the ongoing restructuring. That includes a competitive sourcing study that recommends eliminating more than 200 positions — not because the IRS lost its bid to a faster, cheaper private-sector company but because it won the competition by reducing its overhead.

The IRS will save about $110 million due to the restructuring, which is a significant amount considering that the agency has absorbed $200 million worth of new costs from pay rises, inflation and the costs of modernization due to a flat IT budget for the past four years, Grams said. The Business Systems Modernization budget can only be used to pay contractors, not to cover IRS employees' salaries, he said.

The two areas being restructured are End User Equipment and Services (EUES); the seat management organization for the agency's 100,000 nationwide employees; and mainframe computer operations in Michigan, West Virginia and Tennessee.

Some jobs will be eliminated, "some jobs we need to be paying people more money and be asking them to take on more responsibility, other jobs we're paying people too much," Grams said.

About 100 employees will receive reduction in force (RIF) notices in September as a result of the restructuring, Grams said. Early outs, job swaps, transfers and priority reassignments have cut down the number of RIFs that might have been necessary otherwise, Grams said. "We're very proud of the progress we've made in reducing the impact that this will have on our employees," he said.

But employees are unnerved by the reorganization, said Colleen Kelley, president of the National Treasury Employees Union. "There's a lot of disruption and the IRS doesn't really focus on that," she said. Workers want to return to the days when they could come to work without wondering whether their jobs have changed, she said.

The union won't take job losses as a result of the reorganization lightly, she said. Particularly within EUES, employees will likely begin a dispute process in September if they're being dismissed because the IRS says they lack skills to work in the reorganized function, Kelley said. A small amount of training would close any skills gaps, but the IRS doesn't appear interested in initiating that, she added.

And for seat management employees, restructuring will likely continue past September; EUES is the next function slated for a competitive sourcing study. "That's the only competitive sourcing area that we're doing right now," Grams said. "To say 'only' is like saying you 'only' want to go to Mars — why not Jupiter and Saturn?"

Some IRS officials said that the agency was once reluctant to conduct competitive sourcing studies, which encourages agencies to cut costs by competing with the private sector for federal jobs that are not inherently governmental. But once they realized there were savings to be had, the agency decided to do more.

In EUES, more than 2,000 full-time equivalent positions are at stake. "Whether we keep it in-house or whether we contract it out, we're going to fundamentally change the way we are providing desktop and laptop support," Grams said, adding that no request for proposals has been released yet. The agency decided in April that the function is suitable for competitive bidding.

The restructuring effort will position the in-house bidding team to make a better agency tender offer, Grams said. "They're going to have less distance to travel because we've got the right people, right grades, right jobs right now, so they're in a much stronger position," he said.

Kelley said the union doubts that a level playing field exists for EUES employees because the agency isn't investing enough in to keep its employees familiar with cutting edge technology.

The restructuring is indicative of a larger workforce shift inside the IRS, said John Dalrymple, deputy commissioner of operations support. The days when workers could expect to perform a single job at the IRS for 30 years are over, he said. Technology is changing too fast and the IRS itself is changing from an agency of clerks to one of IT professionals.

The IT side of the IRS needs more technical experts and fewer generalists, Dalrymple said. "In the end, some small number of people will be RIFed in order for us to make that change over to a more technical environment."

Within the organization, workers will have to make efforts to keep their technical skills up-to-date. "I don't think it's different for an IRS techie or somebody working out of Nextel," Dalrymple said.

The IRS now offers more training, Kelley said. "I will give them that, but when it comes to getting new skills, they want you to get them on your own, and even then there's no guarantee that they will help you down the road," she added.

As for the RIFs, "I wonder what they'd say if they were one of those people," Kelley said. "I hope he's right, that it's a small number."

About the Author

David Perera is a special contributor to Defense Systems.

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