Lots of talk, but little action on privatization

Federal agencies, employees and contractors have engaged in heated debates about privatizing government functions in the past year, but outside of the Defense Department, there's been little action on the privatization front, according to a new report.

In its 14th annual report on privatization, the Los Angeles-based Reason Public Policy Institute said opposition to federal privatization efforts was especially loud last year.

"Federal agencies did not make 1999 a banner year for privatization. But that is not to say that privatization did not get its share of the limelight," the report said.

In the report, which encourages agencies to outsource functions available in the private sector, the institute highlighted key events in the privatization movement in 1999.

The report said the debut of the Federal Activities Inventory Reform (FAIR) Act was the highlight of the year. Under the FAIR Act, agencies were required to publish lists of all job functions that could be performed in the private sector.

"When the dust settled, 900,000 federal employees were deemed to be doing work that could be performed by the private sector," the report said. Private contractors vigorously questioned agencies' judgements on what jobs must be kept in-house. The contractor community formed a coalition to petition the Office of Management and Budget for more active oversight of the FAIR Act.

Other groups organized against privatization, notably the American Federation of Government Employees, which launced an anti-privatization campaign last year called SWAMP (Stop Wasting America's Money on Privatization.) AFGE is pushing for more public-private competitions to allow federal employees to compete for work that has already been outsourced to private firms.

Meanwhile, the Defense Department quietly moved on with widespread efforts to open up its functions to competition with private firms. The Defense Logistics Agency, for example, privatized much of its $1.6 billion network of warehouses and distribution centers, and the Army selected a private firm to handle its logistics modernization program.