White House pledges to push job competitions

The presentation of the president's proposed budget last week has again stirred up controversy around the administration's push to expand public-private competitions for federal jobs.

In a budget section devoted to federal management, officials reiterated support for using competitions for commercial activities. The section stated that since a major revamping in 2003 of the Office of Management and Budget's Circular A-76, which governs competitions, "process reengineering, workforce realignments, better leveraging of technology and operational consolidations" translated to more than $6 billion in total expected savings from competed functions, with about $1 billion of that amount realized to date.

"The administration continues to work with the Congress to remove legislative restrictions on competitive sourcing, such as those that require agencies to choose the cheapest providers," officials wrote. OMB supports using the contract framework known as best value, in which officials balance price and the services offered when selecting a provider, but federal employee unions have favored making a contractor show it can do the work for significantly less money in order to win a competition.

The budget stated that eliminating provisions that limit the use of best value contracts "would allow taxpayers to get the best results possible from competitive sourcing."

The American Federation of Government Employees, which battled for a lowest-cost provision that was included in the fiscal 2006 Transportation-Treasury appropriations act, took an early swipe back at the budget statement.

"OMB officials know that the current competition process works for both agencies and taxpayers," said John Gage, AFGE's president. "However, they insist that it be replaced because they know the more subjective process they want would allow more work to be contracted out at higher costs to taxpayers."

Sen. Barbara Mikulski, D-Md., a longtime supporter of federal employees, demonstrated her readiness to take on the issue again this year, calling the budget's statements on job competitions "very disturbing."

"This is part of a dangerous trend to replace our independent civil service with cronyism and political patronage," she said.

John Threlkeld, an AFGE lobbyist, said the union will continue to push for improved appeal rights for the federal employee teams in A-76 contests, as well as measures that ensure contractors do not score better in competitions because of less comprehensive health or retirement benefits than those offered to government employees.

"At a time when contracting out has fallen into ill repute, and justifiably so, OMB is ratcheting up the pressure on agencies to carry out their privatization agenda," Threlkeld said. "At the same time, agencies understand that competitive sourcing is a political exercise, not a serious policy initiative, and the costs and controversies generated far exceed any savings."

Judging from recent public announcements, however, it's not clear that OMB is putting a higher priority on competitive sourcing. During a press event on the President's Management Agenda, which includes competitive sourcing as one of its five key initiatives, officials did not bring up the issue. When asked, OMB Deputy Director for Management Clay Johnson said competitive sourcing was the number one priority for Paul Denett, OMB's procurement policy chief.

Industry groups that represent federal contractors have expressed concern over the results of the competitive sourcing initiative. OMB data published in 2006 shows that federal employees won 60 percent of the jobs put up for competition in 2005 and 90 percent in 2004.

Stan Soloway, president of the Professional Services Council in Arlington, Va., said he supported the use of best value and other measures to increase competition. He said any vote on the issue would be likely to fall along party lines, though, with the Democratic majority able to quash it.

Soloway said contractors have grown weary of starting the long A-76 process, only to face congressional opposition if they win. He said every A-76 competition in the past several years that was decided in favor of the contractor was the subject of a legislative action to kill it, though not all attempts have been successful.

"The administration's position is, by any sort of strategic or objective view, the correct position," Soloway said. "Unfortunately, it doesn't seem to be the politically realistic one right now."