The Defense Department is setting the pace in using OMB Circular A-76 as a privatization tool, and some members of Congress are wondering why civilian agencies aren't following the Pentagon's lead.
Last year, DoD studied 25,255 positions to determine if outsourcing those positions would save the government money. As recently as 1993, DoD only studied 441 positions. And the Pentagon projects it could save as much as $6 billion by 2003 by subjecting more of its business lines to competition using the A-76 process.
Civilian agencies, on the other hand, did not report studying a single position for outsourcing in 1997.
"It seems like [the civilian agencies] just said we're not doing this anymore. They just laid down in the middle of the road," said Sen. Sam Brownback, R-Kan., chairman of the Governmental Affairs Subcommittee on Oversight of Government Management at a hearing Thursday to discuss the A-76 issue.
J. Christopher Mihm, General Accounting Office associate director for federal management and workforce issues, testified that stronger Office of Management and Budget leadership is needed to invigorate civilian agencies' A-76 programs.
"A-76 does not appear to be a high priority at OMB," Mihm said. "OMB has not consistently worked with agencies to ensure that the provisions of A-76 are being effectively implemented."
Mihm also said that OMB has not systematically reviewed the lists of commercial activities that it receives from agencies to determine whether the agencies are missing opportunities to generate savings.
OMB has recently indicated that it intends to devote more attention to implementing A-76. OMB Director Franklin Raines asked all agencies to develop inventories of functions that should be put up for public-private competition. The inventories are due in late October and will be made public.
G. Edward DeSeve, OMB's acting deputy director for management, said civilian agencies are not using A-76 because they are relying on other management techniques, such as reinvention, reengineering and consolidation, to improve their performance.
"I think [the agencies] chose other tools," DeSeve said. "They chose a hatchet instead of a machete."
DeSeve said the A-76 process is a "cumbersome tool that takes about two years from initiation to realization."
Scott Gould, chief financial officer at the Commerce Department, testified that his department would participate fully in A-76 studies in the upcoming years. The department failed to submit an inventory listing any commercial activities performed in-house this year.
"We believe the goals of A-76 can be achieved through other means," Gould said.
As a result of various reinvention efforts from 1992-1997, Commerce achieved a 7.4 percent reduction in total full-time equivalent positions, he said.
Although agencies have resisted using A-76, GAO statistics show that they are spending a substantial amount of money to contract out activities. In fiscal 1997, the government's total personnel costs were about $113 billion, compared with about $110 billion agencies spent on commercial service contracts.
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