New "competition corps" would make outsourcing easier, says report

The Office of Management and Budget should create a "competition corps" of managers versed in federal outsourcing rules to help agencies run hundreds of new public-private job competitions, according to a new report.

The notion of a "competition corps" is one of 37 ideas for fixing the public-private job competition process to come from the Reason Public Policy Institute and the Performance Institute, two think thanks that study government management and that jointly produced the report. They also support providing training for employees slated to go through a job competition, adding a competitive sourcing strategy to agencies' strategic plans, and holding the winners of job competitions to strict performance targets.

A "competition corps" would provide an experienced pool of managers that could help agencies manage job competitions called for by the Bush administration. Most civilian agencies have little experience with the job competition process outlined in OMB Circular A-76, a factor that has slowed compliance with the administration's competitive sourcing initiative. OMB 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.

"A key reason why competitive sourcing initiatives have taken a long time and substantial cost to implement has been the lack of qualified, competent competitive sourcing managers within individual agencies," according to the report, "Designing a Performance-Based Competitive Sourcing Process for the Federal Government."

Some agencies have made procurement executives responsible for complying with the OMB plan, while others, such as the Interior Department, have created a special office to lead their competitive sourcing efforts. Agencies have been quick to tap officials in their organizations who have experience in outsourcing to work on the competitive sourcing initiative. The IRS, for example, picked Bert Concklin, an executive with its multi-billion dollar modernization project who has an extensive background in privatization issues, to lead its competitive sourcing office.

But below the headquarters level, employees with little background in the A-76 process are running many competitions, typically with support from contractors. A "competition corps" would create an experienced group of A-76 experts who could help with this process, the report said.

The report also urged OMB to recognize the difference between activities and avoid creating a "one-size-fits-all" competition process. For example, a competition involving food service jobs should be handled differently than a competition over information technology services, according to the report.

The winners of public-private competitions should also be forced to maintain detailed cost and performance data to make them more accountable to the government. "The losing bidder of a competition should have the right to review the performance and cost achievement of the winner over the life of the contract by examining agency data," the report said.

Accurate cost data is one of the most contentious issues in the job competition process. Contractors say the process fails to capture the overhead costs of the in-house bid, giving in-house employees an advantage. Federal employee unions argue the government often ends up losing money through outsourcing because contractors increase costs after they win A-76 competitions and start performing the work.