White House: No competition goals

OMB competitive sourcing report

The Bush administration has scrapped governmentwide goals for opening hundreds of thousands of federal jobs to competition with commercial firms, attempting to end an impasse with Congress that threatened to stall work on the fiscal 2004 budget.

As part of the President's Management Agenda, the Bush administration pushed agencies to give the private sector an opportunity to compete for at least 15 percent of the jobs that they had identified as being commercial in nature, as required by the Federal Activities Inventory Reform (FAIR) Act.

In recent weeks, though, several members had proposed amendments to appropriations and authorization bills that would block agencies from competing jobs. They cited, among other issues, the administration's use of "arbitrary quotas."

Although the Bush administration has responded with veto threats, officials are also attempting to alleviate at least that particular concern.

Testifying July 24 before a congressional panel, Angela Styles, administrator of the Office of Federal Procurement Policy, said the administration has eliminated the governmentwide goals from the management agenda criteria.

The Office of Management and Budget had already been working with agencies to set their goals, some falling well below 15 percent and some far above, Styles told the Senate Governmental Affairs Committee's Oversight of Government Management, the Federal Workforce and the District of Columbia Subcommittee.

It was clear that with so many exceptions, the rule was not necessary, she said. "We don't want a number, something distracting from what we want to do," Styles said. "We don't want a number to make this controversial."

Subcommittee Chairman Sen. George Voinovich (R-Ohio), who held the hearing because of the concerns about the administration's initiative, praised the decision to officially drop the goals as "a significant change."

"At this point, the percentages really become irrelevant," said Stan Soloway, president of the Professional Services Council and a member of the Commercial Activities Panel, the group that developed the recommendations for revising the competition process outlined in OMB Circular A-76. "Regardless of where one stood on the percentage issue, it was clearly seen in many quarters as problematic," Soloway said.

But members of the subcommittee say they still have problems with the competitive sourcing initiative, such as federal agencies' ability to conduct effective public/private competitions. Many members of Congress are also concerned about the anxiety of federal employees who could lose their jobs.

"No one disputes the importance of a government that is both cost-effective and accountable, [but] as agencies make their contracting decisions, we should ask what impact will outsourcing have on the federal workforce," said Sen. Daniel Akaka (D-Hawaii).

The two major federal employee unions, which submitted testimony but did not appear before the subcommittee, were also concerned that, under the A-76 revision, work kept in-house could be subject to future competition, creating a permanent state of unease.

But David Walker, comptroller general of the General Accounting Office and head of the Commercial Activities Panel, said that a stipulation was necessary. An agency that wins a competition would have to recompete the work only if the organization was not performing. That is a performance standard to which all federal employees should be held, Walker said.

Not all anxiety is warranted, Styles said at the hearing. Every position listed by agencies as commercial in nature under the FAIR Act will not be automatically competed, she said. In fact, more than half of those positions have been designated as closed to competition because, even though they could be performed by the private sector, the agencies feel they need to stay in-house.

The showdown between the White House and Congress is not over. If Congress does not remove amendments attached to several appropriations bills — including the Interior Department bill in the House and the Defense Department bill in the Senate — that would permanently prohibit agencies from competing work, then the veto remains an option, Styles said.