New Game Plan

he last-ditch White House campaign to purge fiscal 2004 funding bills of language that would have undermined its efforts to put federal jobs up for competition with the private sector may have backfired, leaving a sour taste in legislators' mouths and an even tougher fight next year. President Bush has named a well-qualified new point man to rouse support for competitive sourcing, but he faces a difficult task in selling the initiative on Capitol Hill and elsewhere.

In the waning days of the 108th Congress, Bush was forced to wield veto threats to get legislators to remove wording from several 2004 appropriations bills that would have protected federal employees competing against contractors for government work. Bush threatened to veto the Justice, Interior and Transportation-Treasury spending measures. The strategy presumed that lawmakers would be reluctant to hold up multibillion-dollar spending bills to protect federal jobs from contractors. But it didn't work very neatly.

The White House became alarmed late in the appropriations process when administration officials woke up to the fact that the final spending bills for the Interior and Defense departments, enacted in November, included union-backed provisions allowing federal workers at agencies receiving funds from the legislation to organize into teams and submit bids in streamlined job competitions with more than 10 positions at stake. In-house teams at these agencies also would have received a cost advantage in competitions of this size. Job competition rules contained in the Office of Management and Budget's Circular A-76 guarantee civil servants these rights only in competitions involving more than 65 jobs, so the appropriations bills held significant advances for employees.

Clay Johnson, OMB's deputy director for management, says lawmakers' attempts to nibble away at the A-76 process in these bills would have been met with a "real tussle" had former OMB procurement chief Angela Styles been around. But Styles, the architect of the recently revised job competition guidelines, returned to the private sector in September. In her absence, the administration dealt with the unfavorable legislative language by lodging last-minute objections to a compromise version of the Transportation-Treasury bill and by asking lawmakers to override the already enacted Defense and Interior competitive sourcing provisions.

After failing to address the White House's concerns about the Transportation-Treasury compromise in time for the Thanksgiving recess, Congress wrapped that spending measure and six others into an $820 billion omnibus bill. While the administration could not convince lawmakers to use the omnibus to undo competitive sourcing language in the already completed Defense and Interior bills, it did persuade them to leave out provisions from the Transportation-Treasury bill that would have allowed federal employees and their union representatives to appeal competitive sourcing decisions to the General Accounting Office, as companies can. On Dec. 8, the House approved the omnibus bill, complete with the administration's language. The Senate may not complete the bill until late January.

The White House may succeed in tailoring competitive sourcing language to its liking, but the victory would worsen the already shaky relationship between OMB and lawmakers. Even Republicans who generally support the competitive sourcing initiative were upset that the White House stepped in so late in the game to undo compromise provisions lawmakers had struggled to craft. The last-minute objections were all the more surprising and unpleasant to legislators because OMB initially had approved some of the provisions it later rejected.

Now, the White House is counting on David Safavian, named on Nov. 3 to replace Styles, to refine its strategy for defending competitive sourcing and to render veto threats and last-minute maneuvering unnecessary next year. Johnson also would like Safavian to improve OMB's contentious relationship with unions and lawmakers. Carl DeMaio, president of the Performance Institute, an Arlington, Va.-based think tank, says Safavian will need to open a broad dialogue to sell competitive sourcing as "smarter shopping" for the taxpayer. Johnson says Safavian would be in a good position to do just that, considering his Hill experience. Before joining GSA, Safavian served as chief of staff for Rep. Chris Cannon, R-Utah. He also has worked for former Michigan House members William Schuette and Robert Davis, both Republicans, and has been a lobbyist. His wife, Jennifer, works for the House Government Reform Committee.

The new procurement chief's work will be easier, thanks to the solid foundation left by Styles, Johnson says. She testified 22 times before congressional committees during two and a half years at OMB and was "very good at answering questions and illuminating" the details of competitive sourcing, he says. She also reached out to unions, and worked with the Federal Acquisition Council, formerly known as the Procurement Executives Council, on a managers' guide to competitive sourcing released in early October.

Already OMB is marshaling hard data to support the new procurement chief's sales job. The 2003 battles over competitive sourcing often lacked a factual basis, according to Johnson. "Right now it tends to be who has the best anecdotes," he says. OMB is collecting detailed statistics on competitive sourcing, an effort initiated by Styles. Johnson says the database will be complete this spring. "Discussions the next go-round will be much better informed," he says.

Despite his Hill background, the foundation Styles built and new data, Safavian will face an uphill climb if confirmed as procurement chief. He can't expect full backing from contractors because their goals aren't the same as the administration's avowed objectives, DeMaio says. While OMB is concerned about getting the best deal for the taxpayer, companies want to win as many government contracts as possible. Safavian also would have other significant responsibilities in addition to competitive sourcing. Harvard University professor Steven Kelman, who headed OFPP during the Clinton administration, worries that battles over competitive sourcing will distract Safavian from other important procurement issues, such as the need to improve contract oversight and encourage innovation.

What's more, unions have vowed to continue opposing competitive sourcing no matter who's advocating for it. "It's not the personnel-it's the policy," says American Federation of Government Employees President John Gage. "If Safavian has been brought on merely to shill for a failed policy and an A-76 process that has been repudiated by a bipartisan majority of lawmakers, then OMB's privatization effort will continue to be a lightning rod for criticism."