Battle over outsourcing lists just getting started

RICHMOND, Va.-Federal and private-sector representatives discussing how the Federal Activities Inventory Reform Act will play out agreed on one thing Monday: Last week's release of 52 agencies' lists of jobs that might be outsourced is just the beginning of a long, tortuous process.

Meanwhile, the Defense Department is expected to issue new regulations to clarify for its components how to conduct the public-private competitions that normally take place under Office of Management and Budget Circular A-76. The rules will tell DoD agencies how to avoid the appearance of conflicts of interest and how to handle requests for waivers of the A-76 process, said Stan Z. Soloway, deputy undersecretary of Defense for acquisition reform.

Public-private competitions under A-76 are the means the White House has chosen to implement the FAIR Act, which is intended to encourage outsourcing. Deidre A. Lee, administrator of the Office of Federal Procurement Policy, and Stephen M. Sorett, director of government contract services for the accounting and consulting firm of Grant Thornton, agreed with Soloway that the outsourcing process is lengthy and not as clear as it could be.

Sorett predicted that lawsuits will be filed to clarify or improve the process. One complaint from vendors is that OMB decided not to issue new regulations to implement the FAIR law, he said.

Lee said civilian agencies so far have identified 120,000 of their 1.1 million jobs as potentially commercial, but she has yet to review 2,000 or 3,000 pages of listings from the Defense Department. The DoD list comprises more than 300,000 jobs that are "competable," Soloway said. Those lists will be compiled and reissued annually.

Soloway, Lee and Sorett spoke at a session of the Interagency Advisory Council's annual conference here, one of the premier gatherings of leaders of the federal information technology industry and its high-ranking customers in government.

Lee said the process of implementing the law lacks clarity in places, including the lack of a single official repository for agencies' lists that would make them easier to review. Beginning with the Sept. 30 release, vendors and other interested parties have 30 days to study the lists and lodge any challenges of omissions or unwarranted inclusions on the jobs lists. Federal employee unions can also challenge the listing of particular jobs as commercial.

Agency executives have discretion to compete the listed jobs or keep them filled with government employees, but many here, from both government and industry, were predicting that agencies would face intense congressional scrutiny if they fail to move ahead with public-private competitions that will establish the most cost-effective way to get the work done.

Soloway said the FAIR Act would have little impact on DoD's future because the department has been moving aggressively to compete its commercial-style work and has concluded that outsourcing is one useful way to get its work done within budget and time constraints. "The key issue for us comes down to how we conduct our competitions," he said.

Sorett said the long, complex A-76 process and the difficulty of obtaining firm decisions in the federal environment has discouraged some potential contractors from seeking outsourced work.

GovExec.com will continue to monitor agencies' outsourcing reports and update the results in our FAIR Act Report.