OMB reports job competitions saved $1.4 billion last year

Agencies saved $1.4 billion in fiscal 2004 by holding job competitions between federal employees and the private sector, according to the Office of Management and Budget. That figure, up $300 million from 2003, represents the projected savings over the next three to five years.

The announcement was included in remarks by Clay Johnson, OMB's deputy director for management, about the latest President's Management Agenda score card. The agency will soon release a more detailed report about competitive sourcing, including a breakdown of competitions and the savings they have generated by agency.

OMB's numbers indicated that fewer positions were competed in fiscal 2004 than the year before, suggesting that more money was saved per position competed. Agencies reported competing 12,000 positions in 2004 compared to 17,000 positions in 2003.

The increase in savings can be attributed to the types of positions being competed, improved efficiency at holding competitions and possibly lower bids, said Geoffrey Segal, director of government reform for the Reason Foundation, a Los Angeles-based nonprofit organization. In fiscal 2003, savings per position averaged around 15 percent, while last year it was about 25 percent, he said, adding that both fell into the range of expected savings.

Agencies held more standard competitions that involved more than 65 employees in fiscal 2004, compared with the previous year when agencies relied more on smaller, "streamlined" competitions. Larger competitions give private bidders more flexibility and generate greater savings, said Segal.

Larger competitions also group more positions together, which saves administrative costs, but irks union representatives.

"We are obviously concerned that this needlessly haphazard and heavy-handed approach could prevent agencies from fairly considering the unique contributions made by all of the different employees," said John Threlkeld, legislative representative for the American Federation of Government Employees.

AFGE is also wary of the way OMB calculates savings from job competitions. In October, OMB directed agencies to exclude costs related to employee time spent on preparing for competitions during normal business hours.

The new numbers come shortly after the confirmation of the new chief of the Office of Federal Procurement Policy, David Safavian, who has indicated he might change some job competition guidelines.

These latest numbers give him the momentum to pursue competitive sourcing more aggressively, said Segal. "Given the budget deficit, I think this new report will show that it's worth pursuing at a greater pace simply because of the savings that it has brought," he said.

"It sends a signal to the government agencies, 'Look, if you put a goal out there and you didn't make it, we're calling you to task about it,' " said Richard Keevey, director of the Performance Consortium at the National Academy of Public Administration.