House votes to block OMB competitive sourcing initiative

In a setback for one of President Bush's signature government reforms, the House on Wednesday voted to block the White House from using numerical targets to make federal agencies hold public-private job competitions.

The Office of Management and Budget has told agencies to compete or outsource 15 percent of their commercial jobs by October 2003, although it has acknowledged that some agencies may fall short of this target.

The vote sets the stage for a showdown between the White House and Congress over OMB's competitive sourcing initiative. Both the House and Senate versions of the Treasury-Postal Appropriations bill now contain language that would curtail OMB's effort, which is one of President Bush's five governmentwide management reforms. White House Budget Director Mitch Daniels has said officials would recommend that President Bush veto the Treasury-Postal bill if it limits competitive sourcing.

By a 261-166 vote, the House approved an amendment to the Treasury-Postal Appropriations bill that would stop agencies from setting any numerical targets for competitive sourcing. The full bill was later approved by a 306-121 vote. The Senate version of the bill includes an identical provision.

Rep. James Moran, D-Va., sponsored the House amendment, which was supported by the entire Washington-area congressional delegation. Opposition to the amendment was led by Reps. Ernest Istook, R-Okla., and Pete Sessions, R-Texas.

Angela Styles, the administration's point person on competitive sourcing, reiterated the White House veto threat shortly after the House passed the amendment. "Senior advisers would recommend that the president veto the bill if it contains the Moran amendment," she said outside a congressional hearing room. Styles and others had gathered to testify before a House Governmental Reform Subcommittee on competitive sourcing issues, but the hearing was cancelled.

Comptroller General David Walker, who was also set to testify, said that while he opposes the administration's quotas for job competitions, he believes the Moran amendment would too severely restrict outsourcing efforts. "My understanding is [the amendment] would undermine the ability of agencies to engage in a considered analysis of commercial functions based on their mission," Walker said.

The White House could still defeat the provision on the Senate floor or in conference. But supporters, including unions representing federal employees, believe the measure will make it through Congress because it is now in both versions of the Treasury-Postal bill.

"I'm optimistic that we'll be successful in the Senate and it being in both bills will help survive the conference," said Bobby Harnage, president of the American Federation of Government Employees.

Colleen Kelley, president of the National Treasury Employees Union, said the provision would help civilian agencies, which started competitive sourcing programs to comply with the OMB target. "All the activity has been in response to these quotas," she said.

Harnage added that Bush may still veto the bill, but Congress could override his veto. Bush has yet to veto any legislation approved by Congress.

If the measure becomes law, it is unclear whether OMB could encourage competitive sourcing in other ways. When asked if OMB could hold agencies to performance targets for savings or efficiencies-a requirement that could force them to hold job competitions-Styles said that such targets would be prohibited under the provision. "That's still a numerical goal," she said.

The provision would still allow agencies to pursue competitive sourcing on their own, as long as they did not set numerical targets. Some Cabinet secretaries, such as Interior Secretary Gale Norton, have made competitive sourcing a priority. But civil servants-who actually conduct job competitions-would have little incentive to comply with the initiative without pressure from OMB, according to an industry source.

"I don't know why any career civil servant would really try to make this work well if OMB's hammers aren't brought down on them," said the source. "Civil servants can delay anything."