OMB pushing competition

The White House will continue pushing its ultimate goal of competing at least half of the federal functions listed as available for outsourcing to the private sector, Office of Management and Budget Director Mitchell Daniels Jr. said Tuesday.

But, Daniels said, once the competition is over, there will be careful oversight of the winner to ensure that the promised efficiencies actually appear.

The competitive outsourcing of functions that are not inherently governmental is one of the five governmentwide initiatives on President Bush's management agenda. That agenda also includes linking agency performance to budgets, managing human capital, improving financial management and increasing the use of e-government.

Competition is something that agencies should see as an easy and common sense way to improve their performance, Daniels said at the mid-year meeting of the Contract Services Association of America.

Agencies are required to develop lists of the functions that could be outsourced to the private sector under the Federal Activities Inventory Reform (FAIR) Act of 1998. In March, the White House set a goal to compete at least 5 percent of those functions in fiscal 2002, and last month, it raised that goal by another 10 percent for 2003. Eventually, the government's goal is to compete 50 percent annually.

OMB is now looking at how to review the outcome of such competition to make sure that the winner—whether it's the existing federal organization or a private-sector contractor—delivers on the monetary savings, improved service and performance efficiencies it signed on for.

"We don't want to exchange one monopoly for another, one insulated incumbent for another," Daniels said.

The first assignment for Angela Styles, the new administrator of the OMB Office of Federal Procurement Policy, is to re-examine the A-76 process that many agencies use when competing a service or function, Daniels said.