Revamp of A-76 process shouldn't slow competitions, OMB says

A Bush administration effort to rewrite federal outsourcing rules should not prevent agencies from putting the jobs of thousands of federal workers up for competition with private sector companies, Office of Federal Procurement Policy Administrator Angela Styles said Friday.

Agencies should continue to hold public-private job competitions under Office of Management and Budget Circular A-76 while OFPP modifies the circular to reflect the recommendations of an expert panel, Styles said at a Washington conference sponsored by the National Council for Public-Private Partnerships. But she acknowledged that some agencies might wait for OFPP to develop the new process - which will be based on the government's rules for private competition found in Part 15 of the Federal Acquisition Regulation --before holding job competitions.

"[Agencies] should be moving forward to the extent they can and to the extent they already have the infrastructure in place," she said. "Honestly, I think we recognize the fact that some people will probably wait around until the changes are done and there is probably not a lot we can do about that."

The mandate to create a new job competition process - a chief recommendation of the panel - complicates OMB's ongoing initiative to encourage public-private job competitions across government. Many civilian agencies have already started job competitions under Circular A-76, the rulebook that OMB is now working to modify. But private firms that already view A-76 as unfair may be unwilling to bid on work knowing that a new process is in the works, said William Roberts, a lawyer with Wiley, Rein & Fielding.

"Who in the world is going to trust any new [competitions] that are announced?" he asked during a conference session. Many top companies already refuse to participate in A-76 competitions, he noted, which results in poor competitions. "If you don't have the best and the brightest going after these things, you are not going to get the efficiencies."

OMB is forming a working group to develop the new method and hopes to soon post a Federal Register notice seeking public comment, according to Styles. Among other changes, the budget office will press agencies to write the performance work statement more quickly and it may hold in-house workers to binding performance agreements when they win competitions, she said. OMB must also decide when competitions should be decided by low bid and when they should be decided on the basis of "best value," a method that allows non-cost factors such as past performance to be weighed in procurement decisions. Simple activities will still be decided on the basis of cost, she said.

"We're not going to have best value for mowing the lawn," said Styles.

OMB will also modify how it grades compliance with its competitive sourcing initiative, she said. Some agencies can now get good grades even if they fail to compete 15 percent of their commercial jobs, the competition target set by OMB, she said.

"It's not a hard and fast goal and on a case-by-case basis [agencies] will be able to show us that they have built the infrastructure for public-private competition without getting anywhere near 15 percent," she said.

The panel report unanimously rejected the use of arbitrary quotas in making outsourcing decisions, which some panel members saw as a repudiation of the Bush administration's competitive sourcing initiative.

"You know I'd like to think that this panel on that particular principle reminded the President of his goals and objectives of improved performance as opposed to a numbers game," said panel member Robert Tobias, a professor at American University. "It seems to me if you truly are going to manage by results, if you truly are going to manage against your [1993 Government Performance and Results Act] goals--if you are truly going to manage that way, which is what the … President says he wants to manage by, then you don't say we're going to compete 15 percent by two years which drives agencies to make the dumb decisions they've been making."

But Styles also rejected the use of arbitrary quotas and claimed that OMB's competition targets were not "arbitrary" in her comments to the panel report.

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