OMB chief describes sweeping agenda for A-76 competitions

The Bush administration will press to let agencies keep savings achieved through public-private competitions, Office of Management and Budget Director Mitch Daniels said Wednesday. Speaking before hundreds of federal procurement executives at the 2001 Federal Acquisition Conference in Washington, Daniels decried the lack of A-76 studies across government and said that agencies and individual federal workers should have incentives to perform public-private competitions. "Agencies ought to share or reap more of the [financial] benefits from public-private competitions," said Daniels, signaling that the White House is not planning to use A-76 savings to cut agency budgets. Daniels also pledged to streamline the government's outsourcing rules set out in OMB Circular A-76 and said that simplifying the public-private competition process would be "job No. 1" for Angela Styles, the administration's pick to head the Office of Federal Procurement Policy (OFPP). "We are going to do some short term touch-up work on Circular A-76," he said. Daniels did not elaborate on how A-76 would be revised, and an OMB official said that the office is still considering ways to revamp it. OMB is forming a working group of A-76 experts across agencies to determine changes, according to the official. Daniels said the administration would wait for the recommendations made by the General Accounting Office's new Commercial Activities Panel before deciding on broad changes to the government's outsourcing rules. These rules are in dire need of revision because public-private competitions are almost non-existent at civilian agencies, Daniels noted. "I'm struck by the extent to which this proven process has ground to a near halt," he said, noting that civilian agencies compete less than one-tenth of one percent of all positions classified as commercial on their Federal Activities and Inventory Reform (FAIR) Act lists. Daniels added that agencies' FAIR Act inventories are incomplete because they leave off many jobs that are not inherently governmental. Daniels cited examples of jobs that should be open to competition from the private sector, including 2,000 facility maintenance positions at the National Institutes of Health. OMB has directed agencies to submit lists of all positions considered inherently governmental with the next round of FAIR Act inventories, which are due to OMB on June 30. OMB has requested the lists to ensure the accuracy of agency FAIR Act reports. Daniels emphasized his personal interest in opening up government to competitive forces. In the early 1990s, he helped then-Indianapolis Mayor Stephen Goldsmith identify opportunities for outsourcing the city's municipal services. "The general idea that the business of government is not to provide services, but to see that [services] are provided seems self-evident to me," he said. He also reiterated President Bush's pledge to eventually open half of all positions on FAIR Act inventories to public-private competition. Tapping Styles and OFPP to oversee the administration's outsourcing agenda represents a break from the office's traditional roles, according to a former official who requested anonymity. "It's a complete departure," said the official, noting that procurement officials throughout government traditionally have not been responsible for conducting public-private competitions.