Multiple job competition rules likely to create confusion

A compromise version of the $820 billion fiscal 2004 omnibus spending bill approved by House lawmakers Monday contains language apt to confuse federal agencies conducting public-private job competitions and contractors bidding on the work, industry analysts said.

The conference report, filed on Nov. 25, would establish multiple standards for running job competitions where 10 to 65 positions are at stake. Agencies covered by the Transportation-Treasury section of the bill would have different rules than those receiving funds from the other six appropriations measures wrapped into the omnibus bill. The Interior and Defense departments are operating under still another set of standards set in their recently enacted budget measures.

"For an across-the-government [management] initiative like competitive sourcing, I think it tends to be problematic whenever you have differing rules for different agencies," said Mark Wagner, vice president of government relations for Johnson Controls Inc., a Florida-based contractor. "I just don't think that's productive."

The omnibus conference report has already been the subject of much controversy. Some lawmakers were upset that the White House used the omnibus bill to undo competitive sourcing language that House-Senate negotiators had included in a carefully crafted compromise version of the fiscal 2004 Transportation-Treasury budget bill. Lawmakers ended up rolling the Transportation-Treasury legislation into the omnibus bill after they failed to reach an agreement with the administration on competitive sourcing and several unrelated issues.

White House officials convinced lawmakers to strike from the omnibus conference report language that would have granted federal employees--or union representatives acting on their behalf--the right to appeal agency decisions in public-private job competitions to the General Accounting Office. Industry groups had opposed the appeals right language, saying it was too broad.

The omnibus conference report, which the House passed by a vote of 242 to 176, would require agencies covered under the Transportation-Treasury portion of the bill to allow in-house teams to submit bids in all public-private competitions involving more than more than 10 jobs. Agencies covered under the other six spending measures rolled into the omnibus would not be required to do so.

In competitions with more than 10 positions at stake, the omnibus requires Transportation-Treasury agencies to "consider cost as one factor" in awarding work. These agencies would not, however, be forced to grant in-house teams a 10 percent or $10 million cost advantage. Agencies covered by the other sections of the omnibus would not need to even consider a cost advantage in competitions involving 10 to 65 jobs.

The Interior and Defense department budget bills, which are already completed and signed by President Bush, created two additional sets of standards for running smaller competitions. These standards are similar to those that apply to Transportation-Treasury agencies, but both Defense and Interior are required to give in-house teams a 10 percent or $10 million -- whichever is a lower dollar amount -- cost advantage in all competitions with more than 10 jobs up for bids.

Alan Chvotkin, senior vice president and counsel at the Professional Services Council, an Arlington, Va.-based contractors association, conceded that the multiple standards established by the omnibus bill could "make things a bit more confusing." But he said he is generally pleased with the omnibus conference report because it eliminates the appeals right provisions in earlier versions of budget legislation.

If the administration had to create multiple standards as a concession to lawmakers who had supported appeals rights, then its actions are completely understandable and justified, Chvotkin said. "The downside of passing protest rights far outweighs the benefits of a [uniform, governmentwide policy on competitive sourcing]," he said. "The price to pay was far too high for simple consistency."

Federal employee unions have long pushed for appeals rights as a way to level the playing field in job competitions. The administration's opposition to these rights demonstrates that the Office of Management Budget's "privatization scheme is deliberately designed to replace federal employees with contractor cronies," John Gage, president of the American Federation for Government Employees, has said.

But Cathy Garman, vice president for public policy at the Contract Services Association, said that the proposed appeals rights language was simply too drastic because it granted unions the right to protest agency decisions. Private sector employees are not allowed union representation in appeals cases, she said. "I was frankly surprised that all of the protest rights were removed [in the omnibus conference report]," she added. "Our only concern had been giving the unions [appeals rights]."

Garman also noted that the multiple standards in the omnibus could make life difficult for agency officials charged with implementing the law if it is enacted. The Senate still needs to approve the omnibus conference report, and may not vote on it until January. If the varying standards are signed into law, OMB could lessen any resulting confusion by issuing new guidance, she said.

"OMB will continue to work with all agencies to maker sure they understand the parameters under which their competitive sourcing programs need to operate," an administration official said. The administration pushed to maintain a single standard, but "Congress clearly had a different view," the official said.