Competition and Contracting

amaxwell@govexec.com

Federal union leaders and Clinton administration officials told a Senate subcommittee last week that proposed legislation mandating that most federal activities that are not inherently governmental be performed by private companies is unnecessary and could be harmful.

The legislation, known as the Freedom from Government Competition Act (S 314), would "result in consequences quite the opposite of those which it intended," said John Sturdivant, president of the American Federation of Government Employees, at a hearing last week of the Senate Governmental Affairs Subcommittee on Oversight of Government Management, Restructuring, and the District of Columbia. Most small businesses, said Sturdivant, are not capable of providing the kinds of services now provided by federal employees. Agencies, he argued, would have to spend a lot of time and money figuring out which could.

The legislation, introduced by Sen. Craig Thomas, R-Wyo., would establish a preference for reliance on the private sector, with four exceptions--inherently governmental functions, those critical to national security, those in which private sector practices fail to meet government needs and those in which the government can provide goods or services at the best value to the taxpayer.

John Koskinen, deputy director of management for the Office of Management and Budget, told the panel that he supports contracting out, but believes the legislation is unneccesary in light of the administration's "ongoing efforts to ensure an efficient government."

"In addition to the substantial volume of contracting out already taking place, we are currently engaged in the largest effort ever undertaken by the federal government to compete our in-house commercial support workload with the private sector," said Koskinen.

Koskinen said a revised handbook issued in March 1996 on OMB Circular A-76, which establishes procedures for contracting out, embodies a streamlined approach "to permit full and open competition -- on a level playing field -- to determine who should do the work."

Currently, 40,000 jobs in the Defense Department are under A-76 review.

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