Panel has one mandate: Scrutinize outsourcing

Commercial Activities Panel

A joint public/private panel formed to find the best ways to outsource federal functions to industry has a long road ahead, according to experts who believe the effort at least provides a good start.

Last week, the General Accounting Office announced the membership of the Commercial Activities Panel, created under the fiscal 2001 Defense Authorization Act. The announcement follows years of scrutinizing agencies' outsourcing practices and two years of disappointing results with the Federal Activities Inventory Reform (FAIR) Act of 1998, which requires agencies to list functions that could be outsourced to industry.

Section 832 of the authorization act, which mandated the panel, said the 12 members should submit a study to Congress by May 1, 2002. The panel will review procedures used to determine which functions should be performed by government employees and will recommend any changes needed via policy revisions or new legislation.

The panel will also examine existing procedures that compare the public vs. private costs of performing a government function. And it will assess how the Defense Department carries out public/ private competitions under the Office of Management and Budget's Circular A-76 and the Pentagon's implementation of the FAIR Act.

"This is the first time that the federal government has been forced to come to grips with the problems in the process," said Wiley Pearson, defense policy analyst at the American Federation of Government Employees union. "The key thing is that there is acknowledgement . . . that there are serious problems."

Congress has become increasingly impatient in awaiting evidence that outsourcing will truly bring agencies the benefits advertised — financial savings, greater efficiency and improved performance. A large group of lawmakers last year pushed to pass the Truth, Responsibility and Accountability in Contracting (TRAC) Act, which would force agencies to keep better track of outsourcing costs and benefits by suspending all outsourcing until agencies develop metrics and a system to report findings.

The bill drew strong criticism from industry and other quarters and died last winter. But Rep. Albert Wynn (D-Md.) reintroduced the bill in February with 125 co-sponsors. And because experts do not believe the whole bill will pass, parts of it are already being attached to other legislation.

The national presidents from the AFGE and the National Treasury Employees Union are both on the panel, which will be led by David Walker, U.S. comptroller general. There are also members from various facets of the contracting arena, including Stephen Goldsmith, former mayor of Indianapolis, and David Pryor, former senator from Arkansas and now director of the Harvard Institute of Politics.

The mix makes it possible to address what looks like a huge challenge, said panel member Stan Soloway, former deputy undersecretary of Defense for acquisition reform and now president of the Professional Services Council.

"This is not a black and white issue, and [GAO] tried to balance the panel with a variety of people from different backgrounds," Soloway said. "Clearly this is going to have government impact; there are a lot of tough issues here and it gets to the future of government and the role of government."

A key lawmaker on information technology issues, Rep. Tom Davis (R-Va.) has high hopes for the panel and applauds the quality of its members, said Melissa Wojciak, his staff director. He plans to hold a series of hearings on outsourcing and privatization this year as chairman of the House Government Reform Committee's Technology and Procurement Policy Subcommittee, including one on June 27 that will look closely at the FAIR and TRAC acts.

Outsourcing may indeed bring great benefits, but nobody knows for sure, Pearson said. That's why the panel has been created.

"The current process is devoid of any accountability or oversight; we don't know if we're getting better efficiencies, if we're saving money," he said.

Who's on the Panel

The 12-member commercial activities panel is composed of:

David Walker (chairman), U.S. comptroller general. Frank Camm, senior economist, Rand Corp. Mark Filteau, president, Johnson Controls World Services Inc. Stephen Goldsmith, former Indianapolis mayor. Bobby Harnage Sr., national president, American Federation of Government Employees. Colleen Kelley, national president, National Treasury Employees Union. Sean O'Keefe, deputy director, OMB. David Pryor, retired senator and director, Institute of Politics, Harvard University. Stan Soloway (right), president, Professional Services Council. Robert Tobias, distinguished adjunct professor and director of the Institute for the Study of Public Policy Implementation, American University. Director, Office of Personnel Management (Kay Coles James, announced, pending nomination and confirmation). Undersecretary of Defense for acquisition, logistics and technology (Pete Aldridge, announced, pending nomination and confirmation).