Some agencies can miss competition target, OMB says

The Bush administration will allow some agencies to fall short of a target for opening federal jobs to private sector competition, the government's top procurement official said Monday. Angela Styles, administrator of the Office of Federal Procurement Policy in the Office of Management and Budget, said certain agencies would not be required to compete or outsource 5 percent of federal jobs considered commercial in nature in fiscal 2002. "I don't want the 5 percent goal to result in poor management decisions," said Styles at a conference sponsored by the A-76 Institute. "If it means some agencies are at 4 percent, and some agencies are at 6 percent, that's OK." Styles' comments amend a March memorandum from OMB Deputy Director Sean O'Keefe, which set the 5 percent target as a baseline that all agencies should meet. In July, White House budget director Mitch Daniels said OMB would push some agencies to exceed the 5 percent goal. Governmentwide, agencies are still required to compete 5 percent of their commercial positions or 42,500 jobs by September 2002, but OMB will press certain agencies to surpass the target while allowing others to fall short, Styles said. An additional OMB requirement that agencies compete 10 percent of their jobs by the end of fiscal 2003 is also a cumulative goal, according to Styles. "I want to emphasize that [the goals] are aggregate in nature throughout government," she said, citing the Department of Veterans Affairs as an agency that will be allowed to fall short of the 5 percent target. The VA classifies almost 90 percent of its jobs as commercial in nature, making it a tall order to compete 5 percent of these jobs by September 2002, according to Styles. Conversely, the Agriculture Department, which considers only a few of its jobs to be commercial, will be required to compete more than 5 percent of those jobs, Styles said. OMB modified its competitive sourcing targets in part because some agencies tried to meet the 5 percent target entirely through direct conversions, which deny federal workers the opportunity to compete for their jobs, according to Styles. "I am concerned that in an effort to meet the 5 percent goal that agencies will attempt to divide up larger functions, that are appropriate for competition, into smaller pieces for direct conversion," said Styles. "The direct conversion option should only be used for de minimus activities performed by less than 10 [full-time equivalent positions], where cost savings from competition are more difficult to achieve." But OMB is still developing a proposal that would allow agencies to directly convert federal activities of any size, according to Styles. The measure, which Styles said is under "serious consideration," would allow virtually all small businesses that are included in federal preferential contracting programs to receive contracts for work now done by civil servants. At present, only firms that qualify as preferential procurement sources may receive unlimited direct conversions. "[The proposal] is still under consideration," said Styles. "The important point is that we really do want to promote public-private competition." Styles also unveiled a new tool that OMB is using to track the progress of agencies on competitive sourcing and the Bush administration's other government reform initiatives: a "stoplight" scorecard that gives agencies green, yellow or red marks for their performance. The scorecard reflects agency progress toward overall goals such as the 5 percent target and intermediate measures such as the quality of their competitive sourcing plans. OMB officials will present scorecard ratings to the President's Management Council every quarter, according to Styles.