Sen. Craig Thomas, R-Wyo., went before a House subcommittee Monday to push his bill to require agencies to compete with the private sector to perform any work deemed not inherently governmental.
Testifying before the House Government Reform and Oversight Committee subcommittee on government management, information and technology, Thomas said agencies should seek the best value for the taxpayer, which may mean outsourcing or privatizing certain functions.
"The first role of government is not to provide jobs. It's to provide services," Thomas said.
The bill, called "The Freedom from Government Competition Act," (H.R. 716), would set a policy that "no agency may begin or carry out any activity to provide any products or services that can be provided by the private sector." However, if the government determined that the best value for a service could be obtained if public employees performed it, then agencies could retain the function in-house.
The bill is a watered-down version of a similar bill Thomas introduced last year, which did not include a clause allowing competition between private contractors and public employees.
Under the bill, a Center for Commercial Activities and Privatization would be established in the Office of Management and Budget to help agencies identify activities that could be privatized and guide them through the competition process.
G. Edward DeSeve, acting deputy director for management at OMB, said Thomas' bill is not needed because the present mechanism for competing out government services, OMB Circular A-76, already ensures fair competition.
"A-76 permits public-private competitions, and lays out a carefully balanced approach to the costing question, recognizing the differences between public and private offerors and the interests of the taxpayer in that decision," DeSeve said.
But Thomas argued that "many agencies don't take the A-76 process seriously." Businesses have echoed that concern. They say agencies don't account for their costs accurately, excluding overhead costs that private firms must factor in to competitive bids. Agencies also don't pay taxes, businesses note.
"The current A-76 process is purely voluntary, with counter-incentives for agency managers to deal with it seriously," said Robert Raasch, associate manager for domestic policy at the U.S. Chamber of Commerce, at a Senate hearing in June.
L. Nye Stevens, director of federal management and workforce issues at the General Accounting Office, testified Monday that any serious privatization effort will need a political leader to champion it.
"The history of government reform has demonstrated that new policies, whether based in law or in administrative directives, are not self-implementing," Stevens said. "H.R. 716 would give the force of law to general reliance on the private sector for commercial goods and services, and thus would provide a stronger foundation, but not a substitute, for political leadership."
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