Bush administration blasts proposed freeze on contracts

The Bush administration is strongly opposed to union-backed legislation that would allow federal employees to compete for virtually all government contracts, the government's top procurement official said Thursday. At a marathon hearing of the House Subcommittee on Technology and Procurement Policy, Angela Styles, administrator of the Office of Federal Procurement Policy in the Office of Management and Budget, told lawmakers that the Truthfulness, Responsibility and Accountability in Contracting (TRAC) Act would effectively shut down government contracting. The TRAC Act "would freeze all currently contracted activities to determine if they could be performed more cost effectively by the public sector…there is no aspect of the proposed legislation that would contribute to competition, efficiency or accountability," said Styles. The subcommittee also heard testimony from supporters of the act, including sponsor Rep. Albert Wynn, D-Md., and Bobby Harnage, president of the American Federation of Government Employees. A freeze on new contracts is necessary to make agencies improve contract oversight and track savings from contracting out, Wynn said. "The TRAC Act is a rational approach to solving service contracting problems," he said. While OMB opposes the TRAC Act, Styles signalled that the administration is open to allowing public employees to compete for work currently being performed by contractors, a central goal of the legislation. "We do not believe that public-private competitions should be one-time events nor should they be conducted only when the function is being performed in-house," she said in written testimony. "At the government's discretion, competition should be used on a recurring basis to review the situation and to determine who can best provide required services." The hearing gave lawmakers an opportunity to question Styles about the administration's efforts to open up government operations to competition. Subcommittee chairman Tom Davis, R-Va., said he was "alarmed" at OMB's competition targets and questioned how the administration had arrived at such "arbitrary" requirements. OMB has directed agencies to directly outsource or hold public-private competitions on 5 percent of all government jobs considered "commercial in nature" in fiscal 2002. In fiscal year 2003, agencies must compete 10 percent of all commercial jobs. "There is nothing that says that to arbitrarily assign federal agencies target figures is the best means to ensure cost savings for the government," said Davis. Styles replied that OMB is only requiring agencies to use the competitive process and is not mandating that any federal jobs be outsourced. Styles also announced a new piece of the administration's competitive sourcing agenda: OMB will seek to open all Inter-Service Support Agreements (ISSAs) between agencies to competition from private firms. Under an ISSA, an agency provides support services to other agencies on a reimbursable basis. While ISSAs created after 1997 are already subject to competition, OMB plans to issue a Federal Register notice seeking comment on a rule that would require competition for all ISSAs every three to five years. She added that a Bush administration plan to make agencies account for the full costs of their programs will help streamline cost comparisons that can slow public-private competitions.