Outsourcing gripes

Earlier this year, the Office of Management and Budget asked agencies to hold competitions by October 2003 on a total of 15 percent of all jobs considered "commercial" in nature. To make this process as painless as possible, OMB gave agencies some flexibility in how they carry out this directive, but oddly enough, contractors, who stand to gain from this initiative, say that the OMB plan is unfair to them.

Here's the scoop. The Interior Department came up with a plan that allows agencies to hold public vs. private competitions on functions involving 10 or fewer federal employees. Agencies are authorized to directly outsource such functions to the private sector without giving civil servants a chance to compete for their jobs. Interior's plan would allow feds to compete for their jobs and would award the work to the lowest bidder, private sector or in-house.

Sounds fair to me but not to the Professional Services Council (PSC), a trade organization composed of government contractors. PSC officials say government agencies shouldn't have to conduct competitions to make outsourcing decisions on functions with 10 or fewer jobs. Their contention is that if a small function is not essential to an agency's mission, it's a waste of government resources to study/compete the function when the resources could be better used elsewhere.

What's amusing is that another government agency, the Department of Veterans Affairs, came up with an alternative approach that does not involve competition, but the contractors don't like that approach either.

Under the VA approach, in-house employees would form a competitive team and create a bid to meet certain performance requirements. But then, instead of seeking private-sector firms to compete against VA employees, VA officials would conduct market research to determine whether the function could be performed more efficiently in the private sector.

If so, the VA would then compete the work among private-sector firms. VA officials say that this approach would enable them to conduct job competitions in as little as nine months, compared to two years or more using traditional competitions.

The contractors should love this approach, right? Wrong. They say they don't like market research. So what do they recommend instead? Competing the work without first determining whether it could be done more efficiently by the private sector. Suddenly they're not worried about wasting government resources, which was part of their gripe with Interior's plan.

These guys are talking out of both sides of their mouths. To Interior they say, "Don't study jobs to determine whether it would be cost-effective to compete them, just contract them out." To the VA they say, "Don't study jobs and then decide not to contract them out. Compete all of your jobs."

I can't blame these guys for trying to get as much business as they can, but I sure don't follow their logic.

Zall is a retired federal employee who since 1987 has written the Bureaucratus column for Federal Computer Week. He can be reached at milt.zall@verizon.net.