New OMB official defends A-76

The Office of Management and Budget's new deputy director of management, Clay Johnson, defended and explained the new Circular A-76, which governs competitions between federal employees and private-sector companies, during a conference July 2 in Washington, D.C.

Johnson, a friend of President George W. Bush's since high school, said that opening jobs to competition is only one component of the President's Management Agenda.

"It's very important to the president," Johnson said of the agenda. "He expects it to be an important issue to the agencies."

In one year, he said, "The average agency will be far superior to what they best-run agency was two years ago."

Competitive sourcing has raised fears that federal employees could lose their jobs entirely, but Johnson discounted that worry. He explained that in the Defense Department, the only department so far to extensively use A-76 competitions, government workers win more than half the time. When they lose, they usually either go to work for the winning contractor or are moved to other government jobs.

"We don't have an excess number of people. We need good people," he said during his presentation at the Excellence in Government conference. "There's no plan to reduce the size of the workforce."

Taxpayers save an average of 30 percent when work is opened to competition, he said, regardless of who wins. Either the government finds ways to perform the work more efficiently, or a contractor takes over. The taxpayers are Bush's primary concern, he said. "It sounds cold, but we're not here to guarantee employment," he said. "We're here for the taxpayer."

Many federal employees wonder how likely it is that agencies can win work back once it has been outsourced. Although the new A-76 requires new competitions to be held at specified intervals once the contract is initially awarded, the agency's chances may be slim if the employees who once did the work have been re-assigned, retired or moved to private firms, said Bruce Fleming, special assistant in the Treasury Department's inspector general's office.

Johnson said agencies often bring work in-house that had once been outsourced. Jobs that A-76 identifies as commercial are often low-skill jobs that a contractor can come in and learn to do quickly, he said. "Why couldn't the same be true in reverse?"

Speaking after the presentation, however, Fleming said he was not convinced. While the new A-76 is a significant improvement over the older rules, it still doesn't put federal employees on the same plane as contractors, he said.

Government agencies need to be allowed to hire workers quickly and pay them salaries comparable to what private industry pays, he said. "Otherwise it's not a level playing field."

Fleming said he isn't convinced that the authors of the new A-76 looked very far ahead. Contractors could win a competition and later raise their prices. And as the contractor becomes increasingly entrenched, the agency will have diminishing chances to win the work back, he said.

"If agencies aren't going to be able to get the work back, my fear is the taxpayers are going to ultimately get screwed," he said. "I don't think anybody thought about what happens three years down the road."