OMB pushes some agencies to 'contract in' key jobs

Certain agencies have outsourced too many jobs and should consider bringing work currently done by contractors back in-house, the Bush administration's top procurement official said last week. Angela Styles, administrator of the Office of Federal Procurement Policy in the Office of Management and Budget, said that some agencies have sent so much work to the private sector that they are unable to provide effective oversight of the contracted work. As a remedy, these agencies should explore "contracting-in" some work to federal employees, she said. "We don't have the workforce in place to manage those contracts," Styles said at a conference sponsored by the A-76 Institute. "There are some agencies that we believe could look at contracting-in." Styles' comments mark the first time a Bush official has hinted that OMB might encourage agencies to let federal employees compete for work that is currently being performed by contractors. OMB has ordered agencies to put more than 40,000 federal jobs up for competition with private firms by October 2002, but has not issued any guidance requiring agencies to bring work in-house. Styles would not identify specific agencies that are candidates for contracting-in, but did note that some newer agencies already rely on contractors to do most of their work. "Some of the newer and higher technology-oriented agencies have expressed concerns that they already have a very high percentage of their mission performed by contract-as high as 80 or more percent," she said. Agencies that should consider contracting-in will be informed through the President's Management Council or via the budgeting process, said Styles. "We will continue to have [a] dialogue with the agencies through the council and other forums to ensure that, when appropriate, agencies also consider performing competitions for work already contracted-out," she said. Styles' comments came as Congress placed new restrictions on the Pentagon's ability to outsource federal jobs and worked to revive an Army effort to keep tabs on its contractor workforce. In response to a March study that showed more than 60 percent of all Defense Department employees are contractors, the House Appropriations Committee inserted language in the 2002 Defense Appropriations bill that would cut $955 million from the Pentagon's budget for outside consultants. "The Defense Department is not streamlining its administrative practices or eliminating unnecessary or outdated functions, but merely transferring the same functions from federal workers to contractors who arguably have less loyalty and accountability to the organization," said the committee in its report on the bill. A House and Senate conference committee is still working out final details of the Defense authorization bill, which contains language requiring Army contractors to submit information on their workforces to the department. A similar collection effort was halted in June when OMB and the Defense Department found the Army study had violated the 1995 Paperwork Reduction Act. OMB remains opposed to the study, according to Styles. "It's not to say we don't need a better handle on contractors, but that's not the way to do it," she said after her remarks to the A-76 Institute. If completed, the Army study would show department planners how much contract employees get paid, how many hours they work and who their customer is within the department. This kind of information would help procurement officers improve oversight of contracts, said Dan Guttman, a fellow with the National Academy of Public Administration. "The study shines needed light on the critical and unexamined assumptions regarding current contractor accountability," he said.