OMB to report that job contests saved $1.25 billion last year

The Office of Management and Budget is set to report that savings from job competitions between federal employees and private workers grew to about $1.25 billion in 2004 from $1.1 billion in 2003, according to people who have seen figures provided by the agency. Those figures represent the projected savings over three to five years for the competitions held in each fiscal year.

In an off-the-record meeting with contracting groups last week, David Safavian, head of OMB's Office of Federal Procurement Policy, said 80 to 90 percent of competitions are still being won by in-house teams. He provided preliminary estimates of the savings OMB is expected to announce officially on Saturday.

The roughly $1.25 billion in savings translates into about $20,000 per full-time equivalent employee. The savings were likely from a combination of restructuring and eliminating positions, as well as other factors.

"The fact that the government is saving money proves we need to continue these public-private competitions," said Cathy Garman, senior vice president of public policy at the Contract Services Association.

Garman, who attended the meeting with Safavian, said the forthcoming report will include more of the larger "standard" competitions involving 65 employees or more than did the report on 2003 competitions, which focused more on smaller "streamlined" competitions.

The 2003 report, which was released last May, noted that many agencies chose to first engage in streamlined competitions in order to "acclimate" themselves to the process. The report said that as of Sept. 30, 2003, 1,888 full-time equivalent employees were involved in ongoing standard competitions while only 122 were involved in completed standard competitions.

Stan Soloway, president of the Professional Services Council, which represents companies that bid on government contracts, said savings are still "nowhere near what they could be." Contractors, he said, observe that the vast majority of competitions are won by in-house teams, and they decline to participate.

"They look at these 90 percent win rates and say it's not even worth my time to look at it," he said.

John Threlkeld, legislative representative for the American Federation of Government Employees, said he was not invited to meet with Safavian prior to the savings announcement. He said he questions the accuracy of OMB's projected savings.

"We and others have concerns about how they are calculating costs. We're concerned about these being 'guesstimates' and not representative of all costs associated with [competitions]," such as staff time spent on holding competitions, he said.

The Government Accountability Office also has expressed concern that agencies do not accurately estimate their savings from job competitions conducted under rules laid out in OMB Circular A-76, and that the costs of holding the competitions have been underestimated.

If the OMB releases the savings report Saturday as expected, the announcement will fall on the 50th anniversary of President Dwight Eisenhower's order that the federal government should not provide any service or product that can be bought from the private sector.

Geoffrey Segal, director of government reform for the Reason Foundation, a Los Angeles-based nonprofit, wrote in his organization's Web log that the government still has not reached this goal, despite the Bush administration's push toward increased use of competitive sourcing.

He wrote, "Even while this policy has been supported and applied by every administration since, today, more than 800,000 federal employees are in jobs that the agencies themselves consider 'commercial' in nature-like cutting grass on federal property and writing software-these, and countless others are readily available in the private economy."

OMB declined to comment until an official announcement had been made.

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