White House threatens veto over proposed A-76 amendments

President Bush will likely veto the $90 billion 2004 Transportation-Treasury appropriations bill if the final version includes language impeding his administration's competitive sourcing initiative, the Office of Management and Budget said Thursday.

When the House resumes debate over the bill (H.R. 2989) on Tuesday, Reps. Alcee Hastings, D-Fla., and Chris Van Hollen, D-Md. plan to offer amendments limiting competitive sourcing efforts at federal agencies. These amendments would "short circuit" Bush's A-76 initiative at a time when "numerous agencies are starting to make real progress in this area," OMB said in a policy statement.

Hastings' amendment would keep OMB from using appropriated funds to develop inventories of "inherently governmental" positions. The amendment would also block funds for running streamlined competitions, evaluating non-information technology-related bids under the "best value" method, and forcing in-house teams to re-compete for work at regular intervals.

In revisions to the A-76 Circular governing public-private competitions, OMB outlined new rules for streamlined competitions involving fewer than 65 full-time-equivalent positions. The new rules required in-house agency teams winning competitions to re-bid work at regular intervals and tweaked the "best value" competition process, also called the "tradeoff" process. The revised best value method requires agencies to place a greater emphasis on cost when evaluating project bids.

Van Hollen plans to introduce an amendment requiring OMB to rethink these and other measures in the revised circular. His amendment would force agencies receiving Treasury, Transportation or general appropriations to play by the old competitive sourcing rules until OMB comes up with new A-76 revisions that satisfy agencies and contractors.

Bush's advisers will encourage him to veto the appropriations bill if the final version includes such amendments, the OMB policy statement said.

The competitive sourcing initiative, one component of a broader five-part management agenda, "seeks to improve the performance of government services based on the common sense principle of competition," OMB stated. "Prohibiting funding for public-private competitions is akin to mandating a monopoly regardless of the impact on services to citizens and the added costs to taxpayers."

But in a letter asking colleagues for support, Van Hollen noted that his amendment "doesn't eliminate, abolish, or suspend the administration's competitive sourcing initiative." Rather, the amendment "would ensure that when public-private competition occurs, the process [is] fair and balanced, thus protecting the interests of customers and maximizing the interests of taxpayers," he explained.

Both Van Hollen and Hastings told fellow lawmakers that contractors have "said in writing" that they believe the A-76 revisions will make it harder for in-house teams to win work. The percentage of competitions won by federal employees will "dramatically decrease," from 60 percent to about 10 percent, Hastings told the House Rules Committee Wednesday night.

The American Federation of Government Employees doubts that the administration's veto threat will doom the amendments, according to John Threlkeld, an AFGE lobbyist. "Given that the Interior [appropriations] bill, which would block all new outsourcing studies, sailed through the House without even a hostile amendment being offered, AFGE believes that lawmakers will see through the usual OMB bluster," he said.

Hastings also expects a "great deal of support" for his amendment, one of his aides said. His language would slow Bush's competitive sourcing initiative more than Van Hollen's, but both amendments will face at least some opposition from industry groups and fellow lawmakers.

Reps. Tom Davis, R-Va., and Pete Sessions, R-Texas, on Thursday distributed letters urging colleagues to vote against the amendments. The letters praised the A-76 revisions as the "product of a two-year effort that included discussions and negotiations with all stakeholders, including federal employee groups and private sector companies."

The changes provide the "most comprehensive overhaul of the process in 20 years" and will "substantially improve the way the government conducts public-private competitions," the letter said. Davis and Sessions also noted that: "competitive sourcing is not the same as outsourcing or privatization." Federal jobs considered for competition are not automatically lost to the private sector, or privatized.

"Both of [the amendments] are part of a guerilla tactic that's been designed by the unions to stop competition wherever they can," said Stan Soloway, president of the Professional Services Council, an Arlington, Va.-based contractors association.

Congress is trying to stop competitions at several agencies, including the National Park Service, and the competition drive faces administrative hurdles as well. The Veterans Affairs Department, the largest civilian agency, has halted almost all of its competitions because of legal concerns.

Unions and lawmakers have partnered to protest agency decisions to designate jobs as "commercial" under the 1998 Federal Activities Inventory Reform Act. After joining forces with 39 congressional Democrats, AFGE won a FAIR Act appeal on behalf of 157 seafood inspectors at the National Oceanic and Atmospheric Administration. AFGE is also working alongside legislators to thwart the Bureau of Citizenship and Immigration Services plans for competing immigration officer positions.

Jason Peckenpaugh contributed to this report.