Think tank calls competitive sourcing a winning tool for taxpayers

An annual report from a libertarian think tank highlights competitive sourcing as a way for the government to save taxpayers money, despite recent legislative attacks that have slowed the effort.

The report, released on Thursday by the Reason Foundation in Los Angeles, concluded that based on data from the Office of Management and Budget, "taxpayers are the real winners in public-private competitions." The report cited OMB figures indicating that competitive sourcing efforts during the past five years will save taxpayers $7.2 billion.

"Taxpayers save $25,000 for every job that is put up for competition because, even when the government keeps the job, it significantly improves efficiency and reduces costs," the report stated.

But John Threlkeld, a lobbyist for the American Federation of Government Employees, said there are many ways for agencies to improve efficiency that are not as costly and controversial as public-private competitions. He also criticized the foundation for using OMB's data without further exploration.

"Reason's right-wing funders have reason to wonder how their generous contributions are being spent, given that it merely copies OMB's own A-76 savings claim, which no independent third party -- whether an [inspector general] or a [Government Accountability Office] auditor -- has ever corroborated," Threlkeld said.

The think tank acknowledged some frustration with the effort. While OMB reported that public-private competitions performed in fiscal 2007 alone are expected to generate net savings of almost $400 million during the next five to seven years, agencies still are falling short of goals, Reason noted.

In fiscal 2007, the federal government completed 132 competitions for 4,164 full-time equivalent positions, the report stated. An additional 112 competitions covering 6,153 full-time employees were under way at the end of that fiscal year. The report called these results impressive, but noted that they marked a 37 percent decrease from the full-time employee positions placed up for competition in fiscal 2006 and fell far short of the 18,000 positions agencies had planned to open to the private sector.

Additionally, completed competitions covered only 1.5 percent of positions identified as suitable for competitive sourcing.

The government's competition efforts have been "plagued by resistance from Congress," Reason stated, noting that "congressional attitudes toward competition do not appear to be warming either."

The think tank singled out the fiscal 2009 National Defense Authorization Act (H.R.5658), which contains an amendment that would impose a three-year moratorium on new A-76 competitions at the Defense Department.

"On a bipartisan basis, Congress is insisting that agencies look at alternatives to A-76, including insourcing," Threlkeld said. "Even OMB has recognized this, dropping the limited and unpopular 'competitive sourcing' in favor of the broader approach of 'commercial management.'"

The authorization bill has passed the House and will be considered by the Senate after the August recess.

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