Federal agencies must put up for competition at least 5 percent of the positions on their Federal Activities Inventory Reform (FAIR) Act lists over the next fiscal year, Office of Management and Budget deputy director Sean O'Keefe has announced in a memo to agency chiefs. OMB's guidance represents the first time that agencies have been required to use FAIR Act job inventories, which list federal jobs that are commercial in nature, as a guide for outsourcing goals. The 1998 FAIR Act itself does not require agencies to outsource any commercial jobs. In the March 9 memo, O'Keefe directed agencies to develop plans for competing positions listed on their FAIR Act inventories. These plans must include the function, location, training requirements and planned contract support for each position being competed. Agencies can use direct conversions or the public-private competition process outlined in OMB's Circular A-76 to meet the new competition requirement. The memo also directs agencies to outline their plans to compete FAIR Act positions in their annual performance plans, which are due to Congress on April 3. If agencies believe they cannot produce a plan to start competing positions by the start of fiscal year 2002 on Oct. 1, they "should describe the actions they intend to take in order to mitigate this problem," according to O'Keefe. Most agencies should be able to meet the fiscal year 2002 deadline, according to an outsourcing expert. "[Because] agencies have already been going through the FAIR Act process, it doesn't seem to be an unreasonable effort in terms of timeliness," said Allan Burman, president of the consulting firm Jefferson Solutions. Until now, only the Defense Department has signaled any intent to use FAIR Act lists as a basis for outsourcing. Other agencies will have to move quickly to develop competition plans, according to Burman. "[The Pentagon] of course has the machinery in place to be doing these kind of [competitions]," said Burman. "Just about every other agency does not. It's going to be a new effort for the rest of government." Contractors were quick to hail the Bush administration's move. "We believe this is a strong acknowledgement that [President Bush] wants to move forward in the arena of government modernization and privatization," said George Sigalos, spokesman and counsel for the Contractor Services Association of America. O'Keefe's memo also sets specific goals to modify federal procurement policy in the next fiscal year. A minimum of 20 percent of all federal service contracts worth more than $25,000 should be performance-based, according to the memo. O'Keefe further directed agencies to post notices of all contracts worth more than $25,000 on the FedBizOpps.gov Web site. The O'Keefe memo expands on Feb. 14 guidance from OMB director Mitchell Daniels that required agencies to incorporate general outsourcing and e-procurement measures into their annual performance plans.
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