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The presentation of the president's proposed budget last week has again stirred up controversy around the administration's push to expand public-private competitions for federal jobs.

In a budget section devoted to federal management, officials reiterated support for using competitions for commercial activities. The section stated that since a major revamping in 2003 of the Office of Management and Budget's Circular A-76, which governs competitions, "process reengineering, workforce realignments, better leveraging of technology and operational consolidations" translated to more than $6 billion in total expected savings from competed functions, with about $1 billion of that amount realized to date.

"The administration continues to work with the Congress to remove legislative restrictions on competitive sourcing, such as those that require agencies to choose the cheapest providers," officials wrote. OMB supports using the contract framework known as best value, in which officials balance price and the services offered when selecting a provider, but federal employee unions have favored making a contractor show it can do the work for significantly less money in order to win a competition.

The budget stated that eliminating provisions that limit the use of best value contracts "would allow taxpayers to get the best results possible from competitive sourcing."

The American Federation of Government Employees, which battled for a lowest-cost provision that was included in the fiscal 2006 Transportation-Treasury appropriations act, took an early swipe back at the budget statement.

"OMB officials know that the current competition process works for both agencies and taxpayers," said John Gage, AFGE's president. "However, they insist that it be replaced because they know the more subjective process they want would allow more work to be contracted out at higher costs to taxpayers."

Sen. Barbara Mikulski, D-Md., a longtime supporter of federal employees, demonstrated her readiness to take on the issue again this year, calling the budget's statements on job competitions "very disturbing."

"This is part of a dangerous trend to replace our independent civil service with cronyism and political patronage," she said.

John Threlkeld, an AFGE lobbyist, said the union will continue to push for improved appeal rights for the federal employee teams in A-76 contests, as well as measures that ensure contractors do not score better in competitions because of less comprehensive health or retirement benefits than those offered to government employees.

"At a time when contracting out has fallen into ill repute, and justifiably so, OMB is ratcheting up the pressure on agencies to carry out their privatization agenda," Threlkeld said. "At the same time, agencies understand that competitive sourcing is a political exercise, not a serious policy initiative, and the costs and controversies generated far exceed any savings."

Judging from recent public announcements, however, it's not clear that OMB is putting a higher priority on competitive sourcing. During a press event on the President's Management Agenda, which includes competitive sourcing as one of its five key initiatives, officials did not bring up the issue. When asked, OMB Deputy Director for Management Clay Johnson said competitive sourcing was the number one priority for Paul Denett, OMB's procurement policy chief.

Industry groups that represent federal contractors have expressed concern over the results of the competitive sourcing initiative. OMB data published in 2006 shows that federal employees won 60 percent of the jobs put up for competition in 2005 and 90 percent in 2004.

Stan Soloway, president of the Professional Services Council in Arlington, Va., said he supported the use of best value and other measures to increase competition. He said any vote on the issue would be likely to fall along party lines, though, with the Democratic majority able to quash it.

Soloway said contractors have grown weary of starting the long A-76 process, only to face congressional opposition if they win. He said every A-76 competition in the past several years that was decided in favor of the contractor was the subject of a legislative action to kill it, though not all attempts have been successful.

"The administration's position is, by any sort of strategic or objective view, the correct position," Soloway said. "Unfortunately, it doesn't seem to be the politically realistic one right now."

COMMENTS

• The real story here is that the administration feels compelled to announce to its agencies that it is going to continue to push to have full and open competitions for commercial/contractible work. Why? Why is this so controversial? Its news because the Congress is so bent on paying off its union masters that they are already trying to prevent any change to existing Federal monopolies. Where are the members who should be advocating competition and efficiency? Has there been any enabling legislation? On the other hand, there is a long list of members who would restrict competition to arbitrarily protect federal constituents. What about their private sector constituents - when will they be heard or represented along with the taxpayer? The low cost versus Best Value fight was vetted as part of the Revised Circular and even the GAO favored Best Value. Stop the nonsense! Let the taxpayers win and let Federal employees compete openly and fully. Let's be clear, AFGE's Mr. Threlkeld is not seeking protection from minimum wages/benefits, nor does he seek competitions based on DOL SCA prevailing wages/benefits. He seeks legislation to require that Federal wages/benefits be used as the private sector standard - a standard that, once accepted, could put that company and untold numbers of private sector jobs in jeopardy that have nothing to do with A-76. And why are Federal employees winning so many competitions - because most of them are streamlined competitions that do not require a private sector offer. Oh, and yes, competitions to convert from contract to in-house have been conducted, but why would you spend money to add a federal competitor to an open competition when that money could be used to engage a federal monopoly in a competition for the first time? GovExec.com reader Posted February 15, 2007 10:01 AM
• This is the stupidest thing the Republicans and Democrats have done to our budget! Ignore this tripe and get on with the real issues of social security and Medicare! FICA tax should be paid on all earned income and not limited. Monthly benefits should start later for newborns with retirement at 75 for anyone born after 2007. Likewise, "early retirement" should be totally eliminated. Additionally, Medicare premiums should be increased 25% and applied to all earned income. Likewise, Medicare benefits should be limited to major medical and not cover everything from dollar one! Medicare should cover all valid medical expenses after the first $2,500 a year to a maximum of $15,000 a year or $250,000 in a lifetime. Medicare should be the secondary payee and any private insurance should pay first! This means that Medicare would not set "reasonable" rates but simply pay based on total dollars spent. The person would have to question the rates and decide if they want to incur the costs for the procedures - not the government! Less costly to administer and provides any coverage the person needs with cost limits. Paying for prescription drugs would fall in the dollar totals and not be subject to separate coverage. Likewise, there would be no part A and part B and part C and part D. There simply is a dollar coverage that covers medical and dental and is determined by a dollar payout each year and over the lifetime. When it’s gone, it’s gone! taxpayer Posted February 15, 2007 9:07 AM
• The government is more expensive? I'm sorry but where I work, the figures do not bear that out. The average contractor rate around her is about 65-70 dollars an hour. (not that the worker is getting that much). The average government worker around here is a GS 11/12. Even at the highest level of GS12 that hardly amounts to 65 dollars an hour. And don't tell me the government saves on benefits, do you think the company takes that out of hide? The rates we pay include a percentage for benefits. If you think I'm making that much, then just go ahead and give me 60 bucks an hour with no benefits, and I'll handle my own retirement plan and save the government 5 bucks an hour. GovExec.com reader Posted February 14, 2007 5:42 PM