OMB raises goal for fed outsourcing in 2003

OMB March 9 memo

The Office of Management and Budget for fiscal 2003 is raising by 10 percent the number of federal jobs to be put out for bid by the private sector, adding 85,000 positions to the 5 percent already required in 2002.

OMB approved the new policy as part of its preliminary evaluation of agencies' 2003 budget requests. The administration is asking agencies to include plans for competing the full 15 percent of jobs potentially available for outsourcing—which represents 127,500 jobs—when they turn in official budget submissions later this year, said Christopher Ullman, assistant director for communications at OMB.

Agencies compiled inventories of positions to comply with the Federal Activities Inventory Reform Act of 1998. The inventories, which in 1999 identified about 900,000 positions as "potentially commercial," are intended to force agencies to determine which functions are inherently governmental and which could possibly be performed more cheaply and more efficiently by industry.

A small but undetermined percentage of those positions are in the information technology sector.

In a March 9 memo on the fiscal 2002 budget, now undergoing congressional scrutiny, OMB Deputy Director Sean O'Keefe told agencies to offer for competition 5 percent of the jobs on the inventories. That memo also highlighted President Bush's intention to open at least half of the listed positions, but no further timetable has been set, Ullman said.

O'Keefe has made it clear that the administration's push in this area does not mean that jobs must be outsourced. "My view, you've accomplished 90 percent of the objective by the mere act of competitively sourcing it, determining what is the best means of delivery," he told Federal Computer Week.

Industry groups have pushed for OMB to examine agencies' inventories to ensure that all the IT functions that could be better performed by contractors are included. Also, the General Accounting Office has formed a panel to examine the challenges agencies face when considering outsourcing.