An advocate of using competition to drive greater government efficiency explains why a decades-old outsourcing tool needs to die.
Last month, Government Executive’s Charlie Clark posited the question of whether, in a Trump Administration, public-private competitions under the policy and methodology known as A-76 would be or should be revived (“Will Trump Bring Back Outsourcing and A-76?”). As the article demonstrated, opinions on the issue, which was for many years the focus of harsh, often bitter debate, have not changed much. But mine has. Despite having long been, and continuing to be, an outspoken advocate of expanding the use of competition to drive higher government performance and greater efficiency, I believe A-76’s time has passed and it would be wise to let this sleeping dog lie.
Make no mistake about it. Competition is the greatest single driver of performance and cost improvement. In fact, the data demonstrate clearly that savings to the government averaged around 20 percent simply by virtue of introducing A-76 competitions into areas where there previously had been none. And a significant Rand Corporation study demonstrated that those savings were, in fact, largely sustained over the life of the contract (there was almost no longitudinal data for work retained in-house).
That’s the good news, and the primary argument for bringing A-76 out of its current congressionally-mandated mothballs. But A-76 also comes with enormous baggage, glaring gaps, and little credibility among key stakeholders. As such, we need to think differently about how to make these kinds of decisions so the benefits of competition can be garnered even without A-76.
Although it has been in place for nearly 40 years, it really wasn’t until the Clinton administration that A-76 really took off. In fact, despite being a cornerstone of the George W. Bush administration agenda, the Clinton administration conducted more A-76 competitions than any administration before or since. During the 1990s, the outcomes of such competitions were split fairly evenly between industry and government bidders, although the process was lengthy, costly and fraught with controversy and problems. By the late 1990s, the public employee unions had launched an intense, multi-faceted campaign to kill not only A-76 as a whole (and every individual A-76 competition), but virtually all outsourcing in government.
That campaign had an impact on A-76. In the ensuing years, the government A-76 “win rate” rose to over 80 percent. Some are fond of claiming that these overwhelming results prove that the private sector cannot out-perform the government (thus obviating any benefit of A-76), but the truth is that by this time, the private sector had essentially given up on A-76. The always challenging playing field had become fatally tilted. The frequency with which Congress intervened in what were supposed to be objective procurement decisions, the inability of the government to fully and accurately account for its cost to enable a fair competition, the ever increasing costs of competing, and the general resentment the entire process generated all combined to make A-76 a most unappealing source of potential business. As a result, A-76 died a slow and painful death and most “competitions” attracted few, if any bidders. In more recent years, A-76 has been non-existent, principally because of a congressional moratorium on its use. Frankly, there is simply no reason to believe these dynamics have much changed.
But there’s an even more compelling reason to move on from A-76: it was designed for and belongs in another era.
By definition and design, the A-76 process seeks to compare the costs of public sector versus private sector performance for essentially the same work performed in essentially the same way. Innovation occasionally found its way into the process, but generally only inasmuch as it supported the same operational approach. Yet, today, more so than at any time in the past, there is an opportunity to fundamentally change how work is done at almost every level to improve performance and cut costs. But that opportunity hinges on an organization’s ability to change and evolve, often by adopting new, digitally-driven models.
In other words, A-76 is designed to perpetuate the status quo rather than significantly disrupt it, which is where the rest of the world is headed and the government needs to be. Thus, A-76 could be a barrier to progress rather than a source of it.
Instead of fighting over old ideas in old contexts, we need to take a longer and more holistic view. There does need to be some objective means by which to determine how and where to perform work that is not inherently unique to government. But A-76 is not the answer. Instead, our collective energies should be focused on how to transition to new structural, human capital, and business models that will enable the government to most effectively meet its responsibilities. This will require new and different levels of awareness, commitment and leadership on the part of everyone involved, including the president, agency leaders, Congress, government contractors and federal employee unions. Simply re-packaging an old idea isn’t going to get the job done.