Provision in Senate budget bill favors contractors, opponents say

Language in the Senate version of the Transportation and Treasury budget bill caters to industry groups and fails to address serious flaws in the Office of Management and Budget's rules governing public-private job competitions, according to a federal employee union and a House lawmaker.

In separate Oct. 31 letters to congressional budget committee members, the American Federation of Government Employees and Rep. Henry Waxman, D-Calif., accused Sens. Craig Thomas, R-Wyo., and George Voinovich, R-Ohio, of sneaking provisions favoring private sector engineering and architecture companies into an amendment to the 2004 Transportation-Treasury budget legislation (H.R. 2989). The amendment, approved on Oct. 23 by a vote of 95-1, would impose extensive reporting requirements on agencies conducting public-private competitions and would make several modifications to OMB's revised Circular A-76.

"Because this bill came to the floor at the last minute, all the amendments to it had to be prepared at the last minute," said Scott Milburn, a Voinovich spokesman. "We are aware that there are things in [our amendment] that need to be modified."

During a floor debate on the bill, Thomas and Voinovich outlined five key components of their amendment, but failed to mention a section requiring agencies to use 1972 Brooks Act procedures for awarding engineering and architectural contracts, the AFGE letter said. Under the Brooks Act, agencies must award contracts in two steps. Agencies first select a proposal based on quality. The price of proposals is only a consideration during the second step.

"Mandating the use of Brooks Act procedures would prohibit federal managers from even considering cost or price, even though federal employees are already satisfactorily performing the function under competition," Waxman wrote in his letter. "This is a recipe for wasting money."

But according to information distributed by the American Council of Engineering Companies (ACEC), an industry group with more than 5,800 member companies, the Brooks Act allows agencies to negotiate a reasonable price for a proposal. In the first phase of awarding a contract, agencies meet with companies vying for work and gather details on various architectural or engineering designs. Agency officials then select the most qualified proposal, without considering expense.

In the second phase of the award, agencies bargain for the best price possible on the selected proposal. If an agency does not feel a contractor is offering a good deal, the agency reserves the right to select an alternative proposal. The Brooks Act therefore strikes a balance between securing high-quality work and spending taxpayer money frugally, the industry group claims.

The federal government and 44 state governments regularly use Brooks Act procedures to award contracts, according to ACEC. The procedures "ensure that government managers benefit from the highest quality in design services and . . . that taxpayer dollars for infrastructure are efficiently spent," said ACEC President Dave Raymond.

In its letter, AFGE claimed that in addition to requiring agencies to apply the Brooks Act to A-76 studies for engineering and architectural work, the Thomas-Voinovich amendment fails in its attempts to remedy problems in OMB's May revisions to Circular A-76.

For instance, the amendment purportedly strikes a Circular A-76 requirement that in-house teams winning job competitions re-compete for work every five years. But according to AFGE, the amendment is worded so that it simply prevents agencies from asking in-house teams to re-compete before five years are up.

Voinovich hopes House-Senate negotiators will address flaws in the amendment when writing their conference report on the budget bill, Milburn said.