Behind the Curtain

OMB officials tried to make A-76 competitions more transparent, but some say the new rules aren't enough.

On Jan. 24, officials at Fort Knox, Ky., the Army fortress that once safeguarded the U.S. gold reserve and the English crown jewels, began searching for a new treasure: doughnuts. To be precise, they sought 291,000 of them-enough chocolate, glazed, jelly and blueberry doughnuts to indulge sugar cravings on the post for a year.

Fort Knox broadcast its need for sweets on FedBizOpps, the online catalog of federal contracting opportunities. Required reading for government contractors, FedBizOpps is perhaps the world's largest want ads, where federal agencies seek everything from doughnuts to detention space. As a general rule, if a company sells it, some agency is looking to buy it on FedBizOpps. In September 2003, the National Institute on Aging announced it was seeking a "standing colony of mutant mice."

Lately, agencies have used FedBizOpps to advertise a new contracting opportunity: the chance to win federal contracts by outbidding civil servants in public-private job competitions. The Bush administration decreed that all such contests be announced on FedBizOpps as part of its May 2003 rewrite of Office of Management and Budget Circular A-76, the rule book for job competitions.

FedBizOpps figured into the outsourcing overhaul in other ways. For the first time, Bush officials required agencies to post the results of streamlined job competitions, which involve 65 or fewer civil servants, on FedBizOpps. They also tucked a sentence into A-76 rules that allows contractors and the public to obtain a one-page summary of the competition results, so they can see how an agency arrived at its decision to keep work in-house or outsource.

OMB believed these provisions would bring transparency to the streamlined process, which long has been seen as susceptible to bias. Historically, streamlined results tend to overwhelmingly favor one side. At the Defense Department, civil servants won 51 of 52 streamlined studies from fiscal 1995 to fiscal 2003. And the streamlined format gives considerable discretion to agencies. For example, officials can use market research to compare the cost of the in-house unit with the going rate in the private sector in lieu of soliciting bids from contractors.

Nothing in the old A-76 prevented procurement officials from checking the in-house cost before surveying the market, making it easy to rig a competition. "Shopping for contract prices that were higher or lower than the in-house cost estimate was possible if you wanted a specific outcome," says Annie Andrews, assistant director for competitive sourcing and privatization at the Defense Department.

OMB banned this practice in its rewrite of A-76. Still, the circular allows market research in streamlined competitions, one of many tools OMB endorsed to make the process as easy as possible. This is where FedBizOpps comes in. If stakeholders have access to competition results, they can hold agencies accountable, OMB argued. Angela Styles, the former OMB procurement chief who wrote portions of the revised A-76 regulations, believes disclosure is the key to keeping the process honest.

"What we tried to do in the streamlined process was to make it easy and convenient, recognizing that if you wanted to game industry you could. But all of the documentation has to be publicly available," she says. "I think there is a burden on industry and Congress to keep an eye on the competitions. When something is wrong, industry and Congress need to bring it to the attention of the administration, the press and the public."

But OMB's proposal to let stakeholders see a one-page summary of results struck some contractors as inadequate. "You really don't get much detail on that one-page form," says Stan Soloway, president of the Professional Services Council, an Arlington, Va.-based contractors association. "In our meeting with Angela, our initial comment was you need more meat on the bones, so neither side, public or private, would have reason to grouse."

Soloway wanted agencies to disclose how they came up with the private sector bid. Did it come from market research or an actual solicitation? How comprehensive was the market research?

You won't find answers to these questions on the form released by agencies. Generally, the forms simply show the cost of the in-house and private sector bid: $8.9 million versus $8.5 million in the case of a competition for facilities support at the Health and Human Services Department's Administration for Children and Families. Finding out how many federal workers were involved in the competition (seven) or how the private bid was devised (market research, including prices taken from the General Services Administration schedules) requires additional, time-consuming inquiries.

Dale Warden, chief operating officer at Warden Associates, a Springfield, Va.-based consulting firm, believes agencies should provide more information. "The form by itself doesn't fully explain the analytical process being used to tally the private sector cost," he says. "[Agencies] could write up a simple summary of the method used."

Some contractors have filed requests for the forms. Dennis Gray, a contracting officer at the Administration for Children and Families, says he has received about 10 requests from industry. Officials at the Program Support Center, a unit within HHS, also have received a few industry requests for documentation.

But John Eberhart, a contracting officer with the Agriculture Department's Natural Resources Conservation Service in Temple, Texas, says the disclosure requirement has generated little interest at his agency. "You were the only one who asked about that," he said during an interview with Government Executive. At the Center for Medicare and Medicaid Services, where civil servants won 17 of 17 streamlined competitions in fiscal 2003, contractors have made no requests for documentation. One official at the HHS agency was surprised to learn the streamlined forms could even be made public.

Styles says agencies should post forms on FedBizOpps, to make the process as transparent as possible. "They're supposed to be very accessible. All that documentation should just be up on a Web site."

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