Provision in Defense bill could aid feds in job competitions

The final version of the Pentagon's fiscal 2004 budget bill includes language intended to level the playing field for in-house teams bidding on civilian Defense jobs.

Under the legislation approved by Congress Thursday, civilian workers at Defense would receive a cost advantage in job competitions involving 10 or more employees.

The Office of Management and Budget's May revisions to Circular A-76, which sets guidelines for public-private competitions, limit in-house cost advantages to competitions where more than 65 full-time-equivalent jobs are at stake.

The final Defense appropriations bill also requires the Defense Department's employees to reorganize into "most efficient organizations" to submit a more competitive bid for projects involving 10 or more workers. Restructuring is optional for competitions of that size under the revised A-76 circular.

Sens. Edward Kennedy, D-Mass., and Saxby Chambliss, R-Ga., shepherded these measures through House-Senate negotiations. In a Sept. 8 letter to Senate Appropriations Committee Chairman Ted Stevens, R-Alaska, Kennedy and Chambliss said the provisions would "achieve a genuine fairness in public-private competitions" by ensuring that "federal employees will be able to submit their best bids [and] that contractors must demonstrate appreciable savings before taking work away from federal employees."

The cost advantage measure, first introduced by Kennedy in the form of an amendment to the Senate version of the appropriations bill, would reduce the price of in-house bids by either 10 percent or $10 million-whichever figure turns out to be a lower dollar amount.

The cost advantage would apply to the team currently performing the work up for bid, meaning that, in theory, a contractor could receive the advantage. But in practice, the advantage almost always goes to teams of federal employees, since agencies rarely subject contractor-held jobs to public-private competition.

The American Federation of Government Employees applauded the Kennedy-Chambliss measures. "These same requirements should be imposed on all non-Defense agencies," said AFGE President John Gage. "This is a significant first step in rewriting the extremely pro-contractor OMB Circular A-76."

Joe Sikes, director of Defense's office of competitive sourcing and privatization, could not be reached for comment Thursday, but has previously said that the department is opposed to Kennedy's language. The measure restricts Defense's flexibility in running competitions, he has said.