OMB director bolsters wary feds

Joint Financial Management Improvement Program

The director of the Office of Management and Budget says the role of transforming the federal government is the role of every federal employee, regardless of their management level.

At a meeting of the Joint Financial Management Improvement Program, OMB Director Mitchell Daniels Jr., said that federal employees must be "agents of continuous improvement, productivity and performance." The federal government is in the midst of an enterprisewide financial management reform, calling for the modernization and consolidation of systems to produce a more efficient process. One of the more controversial components of the system, as outlined in the President's Management Agenda, is the call to "competitively source" more operations to the private sector, which has drawn the ire of federal unions and congressional Democrats.

"We need to look at the President's Management Agenda as an opportunity," Mitchell said. "Some see it as daunting and impossible, but federal agencies have proven that the challenges are manageable and the impossible is achievable."

He said that turning activities over to the private sector is an important part of the government's transition strategy. He recognizes that many in the federal sector are opposed to the strategy because it could cost some federal employees their jobs, but he argued that the federal government's role is to be as cost-effective and efficient as possible for the taxpayers.

"The notion of competitive sourcing is often mislabeled as outsourcing, which is wrong, or privatization, which is just untrue," Mitchell said. "A lot of people view this with apprehension, but we [in the federal government] need to be indifferent to whether incumbent employees or a private firm that competed for a contract provides the service. As long as the taxpayer wins, we need to be indifferent."

Robert Shea, a counselor for OMB, said the federal government simply shouldn't be in competition with the private sector for jobs that industry could do better, more efficiently or less expensively. There are certain positions that will remain in the federal government, but jobs that can be performed better by industry should be outsourced.

"We need to make the process of government as efficient as possible, as practicable as possible," he said.

A major shift that may soon take place in the federal government is that government jobs will be assumed to be commercial in nature unless managers can prove they meet the criteria of being "inherently governmental." Thus far, government jobs were considered to be inherently governmental unless a manager designated them as commercial. A revision of OMB Circular A-76 — which covers the process for competing government services with the private sector — would shift that burden of proof and is under review from federal agencies.

"This marks a seismic change," said Bert Concklin, director of competitive sourcing for the Internal Revenue Service. "Up to now, managers were at liberty to call positions governmental. Now the job becomes profoundly more difficult. The burden of proof has shifted."