Pending procurement reform provisions concern industry

Industry representatives on Monday expressed concern that provisions tacked on to pending appropriations and authorization bills could put an unfair burden on companies wanting to do business with the federal government.

A competitive sourcing provision, Section 845, already in the Senate Defense authorization bill (S. 1547) and an amendment passed Monday are causing particular concern. Representatives from several contractor associations said at a panel discussion in Washington that the measures would reverse decades of progress in identifying government functions that are more efficiently performed by the private sector.

Trey Hodgkins, vice president of federal government programs at the Information Technology Association of America's public sector group, said Sec. 845 in the Senate authorization bill would require Defense Department officials to take an inventory of all the jobs being performed by contractors and to replace contractors with federal employees if that would save the government any money.

Under current law, groups of 10 or more federal jobs may be outsourced if it would save the government at least 10 percent or $10 million. The Senate legislation, if enacted, would allow jobs already outsourced to be rolled back into the federal workforce if doing so offered any savings. The industry representatives argued this creates a presumption in favor of work by federal employees.

"When the government wins over 87 percent of these [competitions] right now, it's beyond belief, at a time when you can't get government workers into the workforce… to have these insourcing provisions to try to bring back everything in-house with no justification," said Colleen Preston, senior vice president for public policy at the Contract Services Association.

But the provisions' sponsors argue they would reverse an existing prejudice in the system, not create a new one. Sens. Barbara Mikulski, D-Md., and Edward Kennedy, D-Mass., co-sponsored an amendment to the Defense authorization bill that they say would mark "a major victory for federal employees in their fight against unfair contracting out procedures and discriminatory practices that favor private contractors."

The amendment passed the Senate by a 51-44 vote early Monday evening.

John Threlkeld, legislative representative for the American Federation of Government Employees, said the Mikulski-Kennedy amendment would require Defense to bring back in-house work that is inherently governmental and was wrongly contracted out, jobs that are being performed poorly by contractors, and work that was not subject to a proper public-private competition. AFGE and some lawmakers consider previously established guidelines for insourcing this work to be inadequate, Threlkeld said.

The Mikulski-Kennedy amendment also addresses health care and retirement benefits for contractors. According to a statement, the amendment will no longer allow contractors to gain an advantage in sourcing competitions by offering inferior health or retirement benefits.

"Right now, private contractors can win a bid on federal work simply because they provide inferior or no health and retirement benefits," Mikulski said. "This is bad for our federal employees, bad for the contractors who are doing the work and bad for our health care system."

Preston, Hodgkins and Chris Braddock, director of procurement policy at the U.S. Chamber of Commerce's economic policy division, also raised concerns over separate legislation relating to the suspension and debarment process for contractors, a measure mandating that contractors use the Homeland Security Department's E-Verify program to check new workers' employment eligibility, and language expanding the False Claims Act.

Industry representatives praised Congress for spending bill provisions attempting to strengthen the government's acquisition workforce. Preston said CSA consistently names holes in the acquisition workforce as one of the most significant procurement problems.

"We seem to be in one of these perfect storms of scandals hitting and one abuse after another hitting the headlines, but when you go behind the investigations … they all boil down to a lack of acquisition workforce resources," Preston said.

Congressional efforts to fence in appropriations for procurement personnel are crucial, Preston said, because agencies are facing workforce shortages and budget cuts simultaneously. He and Braddock praised several agency officials, including Elaine Duke, DHS' chief procurement officer, Shay Assad, Defense's procurement and acquisition policy director and Molly Wilkinson, chief acquisition officer at the General Services Administration, for being proactive in trying to draw people in to public sector acquisition work.