Proposed bill will force agencies to outsource

A bill introduced last week would require federal agencies to outsource nearly all activities that the Office of Management and Budget deems inappropriate for government agencies.The bill introduced by Sen. Craig Thomas (R-Wyo.) also would prohibit agencies from offering services to other agencies in most cases.

The proposal the 1997 Freedom from Government Competition Act continues a drive by Republican lawmakers to privatize as much of the government's work as they believe feasible. OMB which fought a similar measure last year is likely to oppose this bill too.

Thomas said at a briefing last week that his plan would save taxpayers billions of dollars if vendors were allowed to compete to provide services and products that are traditionally supplied by federal workers. The proposal would discourage if not prohibit the franchise-fund pilots set up by OMB last year that permitted six agencies to market data processing and other services to other agencies as an alternative to buying them from the private sector.

Thomas said his legislation would not call for an outright ban on franchising activities but it would make such arrangements extremely difficult. "You find agencies gearing up to provide services to each other and that is something we want to avoid " he said.

John Koskinen deputy director of management at OMB said he had not yet seen the new legislation but added that he does not believe any such law is necessary. "We plan to take a look at the language itself and see what changes have been made [from last year's bill] " he said.

A New Twist

A significant change from last year's version is a stipulation that would allow agencies to provide services if they prove they can do it more efficiently or cheaply than private vendors said Chris Jahn a legislative assistant on Thomas' staff. The new version calls on OMB to set up a "center for commercial activities" that would hear complaints from vendors who believe an agency was engaging in an activity that should be provided by private companies.

New language also would encourage the government to consider the rights of federal employees displaced by privatization and help those employees make the transition to the private sector when possible.

If the language passes OMB would be required to "identify everything the government does that is commercial in nature" and then "create a transition schedule to outsource these functions to the private sector " Jahn said. He said privatized functions would run the gamut "from very mundane janitorial services to very high-tech stuff."

The language would give OMB leeway to determine whether federal agencies could compete with private companies by submitting their own bids on federal contracts Jahn said. But he added that the legislation seeks to prohibit as much competition from federal agencies as possible. "Government competition is a growing problem and it is philosophically wrong " he said.

Outsourcing would create private-sector jobs and reduce government positions that are funded by taxpayers Thomas said.

Koskinen said the government ought to attempt to obtain services at the lowest cost possible regardless of whether the provider is a private company or government agency. He added that OMB should be able to gauge by the end of the year the success of the six franchise-fund pilots most of which focus on information technology services.

Sen. John Glenn (D-Ohio) who led the opposition to similar language last year had not reviewed the new legislation as of last week but he remained supportive of OMB's efforts to make federal services more efficient a Glenn staffer said. He added that the legislation will probably receive a "friendly hearing" by Republican leaders of the Senate Governmental Affairs Committee's Oversight and Government Management Subcommittee. Subcommittee chairman Sen. Sam Brownback (R-Kan.) is a staunch proponent of privatization sources said.