Legislative amendment would suspend competitive sourcing at Defense

An amendment to the fiscal 2009 Defense authorization bill would suspend public-private competitions at the Defense Department for three years.

Rep. Nancy Boyda, D-Kan., introduced the provision to H.R. 5658, marked up by the House Armed Services Committee early Wednesday morning. It calls for a three-year moratorium on public-private competitions performed under Office of Management and Budget Circular A-76 "to ensure that the services' operational obligations may be fully met while efforts are under way to increase end strength, implement the 2005 [base realignment and closure] decisions, and execute transformational initiatives as our forces are simultaneously conducting operations in Iraq and Afghanistan."

Boyda has said while contractors have their place in the department, she has heard repeatedly that the pendulum has swung too far toward excess contracting.

"The Boyda amendment allows the Department of Defense, not the White House, to determine when it is in the best interest of national security to contract out," she wrote on her Web site.

While the provision would not limit Defense's ability to hire support contractors, it would restrict the department from forcing government employees to vie for their jobs with contractors. The amendment would prohibit new A-76 competitions, but would not affect ongoing or existing ones. A three-year moratorium on competitive sourcing at the government's largest agency would almost certainly be the death knell for the key Bush administration initiative.

An OMB official, who had not seen the recently introduced amendment, said the department "has a long history of using public-private competition as an effective management tool, which has resulted in significant savings for the taxpayers." The official, who spoke on background, said Defense has reported an estimated $2.95 billion in gross savings for public-private competitions completed from fiscal 2003 to fiscal 2007, with a return of approximately $20 for every dollar spent on competition.

During the past few years, some lawmakers have expressed concern that OMB is putting undue pressure on agencies to perform public-private competitions. Language was included in the fiscal 2008 Defense authorization act to prohibit OMB from directing or requiring the Defense secretary or the head of any military service to participate in competitive sourcing.

The Pentagon's inspector general recently issued an informal report on OMB's influence over public-private competitions at the department. Several Defense officials told the IG that they did not feel they were strong-armed to complete a specific number of public-private competitions, but there was implicit pressure from OMB to promote the initiative.

Several top Army officials have said they are still held to a target number. According to the chief of its business policy and development division, the Army's statutory goal is to compete 77,873 positions as soon as possible. Officials told the inspector general that they feel "extreme pressure from the [Office of the Secretary of Defense] to conduct public-private competitions" and they asked for relief from competitive sourcing targets, but to no avail.

Federal employees unions have opposed the administration initiative vehemently. The International Federation of Professional and Technical Engineers released a statement Tuesday supporting Boyda's provision.

IFPTE President Gregory Junemann wrote to Rep. Ike Skelton, D-Mo., chairman of the House Armed Services Committee, urging inclusion of the amendment in the authorization bill. Junemann said Boyda's amendment was crucial, as Defense was failing to adhere to provisions of last year's authorization bill directing the department not to follow OMB contracting quota requirements. The union also insisted Defense continues to force federal employees who won A-76 competitions to recompete for their jobs every five years, despite legislation reversing that requirement.

"Unfortunately, the [department] has refused to conform to the law, and [Rep.] Boyda's amendment would put a stop to the A-76 process until the existing law is followed," wrote Junemann.

OMB's annual report on competitive sourcing, released in early May, touted continued savings through the program but also showed far fewer competitions than agencies expected. Slightly more than 4,000 jobs were competed in fiscal 2007 compared to the 18,000 jobs that agencies had intended to compete.

Boyda's provision would be the latest in a series of legislative restrictions on the A-76 program, actions that OMB officials fault for the initiative's slower than expected growth.