A-76 competitions may not hurt federal workers’ pay

The public-private competition process may not cause cuts in pay and benefits for federal workers, according to a new General Accounting Office report. The GAO report, "DOD Competitive Sourcing: Effects of A-76 Studies on Federal Employees' Employment, Pay and Benefits Vary," (GAO-01-388) looked at three recent Defense Department competitions held under the rules of OMB Circular A-76. GAO concluded that although most A-76 competitions lead to cuts to the federal workforce, regardless of who wins, it is not necessarily true that competitions result in lower wages for affected employees. Differences in location, the work involved and the existence of other government jobs make it hard to gauge the impact that A-76 studies have on employees, according to the report. "These factors make it difficult to draw universal conclusions about the effects of A-76 decisions on affected federal employees' employment options, pay and benefits," states the report. Still, GAO did draw some lessons from the three case studies, which involved two competitions at Wright-Patterson Air Force Base in Ohio and one competition at Tyndall Air Force Base in Florida. A contractor won the Tyndall competition, while a contractor and an in-house team split the two Wright Patterson competitions. After these competitions were decided, about half of all affected workers remained in the civil service, while most others took cash incentives to retire or left voluntarily, according to the report. Only a few employees were laid off as the result of the competitions. In both competitions won by the private sector, the contractor hired all of the outsourced federal workers who applied for work. Under A-76 rules, a contractor that wins a public-private competition must give outsourced federal workers first dibs on contractor jobs. GAO could not determine whether displaced workers hired by contractors received lower pay and fewer benefits in the private sector. The report did make clear that A-76 competitions often lead to job cuts even when the in-house bid prevails. "The new in-house organization typically restructures the work and reduces the number of employees required to perform the work," the report said. Democratic Senators Russell Feingold and Herbert Kohl of Wisconsin requested the report. Both senators have previously expressed concern about the effects of A-76 studies on displaced federal workers. Sen. Kohl is looking to the new GAO Commercial Activities Panel to overhaul the government's A-76 policy, according to a spokesman. "It's unfortunate that GAO couldn't come up with more conclusive data in this report," said Lynne Becker, Kohl's spokesman. "The Senator is now looking for the results of the GAO panel on this issue." One contractor hailed the report as evidence that outsourcing does not necessarily harm federal workers. "What struck me was that GAO was clear that the assumption that outsourcing government functions hurts government workers isn't clear," said Stan Soloway, president of the Professional Services Council. "In some cases [outsourcing] is to the advantage of [federal workers]." The Defense Department agreed with GAO's findings.