OMB report backs competitive sourcing

As the Bush administration's drive to increase competitive sourcing of federal work generates new struggles in Congress, the Office of Management and Budget released a report today that offers reassuring figures to nervous federal employees.

According to the report to Congress, federal employees won 89 percent of the 662 competitions completed in fiscal year 2003. The competitions are expected to save the government a net of $1.1 billion during the next three to five years, or $12,000 per full-time employee.

"These are good returns for an initiative that has faced statutory restrictions, cultural challenges and a large learning curve, especially at civilian agencies that, until recently, had relatively little experience with using competition as a management tool," the report reads.

Colleen Kelley, president of the National Treasury Employees Union (NTEU), branded the figures in the report "fiction."

"There is no way that federal agencies relying on the guidance that OMB provided on preparing these reports can accurately define their costs related to contracting out," she said. "Even if there are savings — and there's no real proof the savings are either real or substantial — there is undeniably a cost to taxpayers in the form of reduced services affecting important programs. After a public/private competition for federal work, there often simply aren't enough agency employees left to provide the service at the level the public wants, needs and expects."

Competitive sourcing has faced opposition from federal employee unions including NTEU, and some members of Congress. The opposition grew more intense last year after a revised version of OMB's Circular A-76, which governs the practice, was published.

Proponents, including the Bush administration, argue that competition saves taxpayer money even when the federal employees win the competition because it drives them to become more efficient.