OMB 'Out of Practice' on Competitive Sourcing, Adviser Says

Preliminary moves by the White House to ease the moratorium on reviewing federal jobs for outsourcing under the guidelines in Circular A-76 have drawn some skepticism within the Office of Management and Budget.

Linda Springer, President Trump’s senior adviser on management issues who recently announced her June 30 retirement, told reporters during a June 15 briefing on curbing agency reporting requirements that her “personal view is that OMB is out of practice in running those competitions [for whether the public or private sector should perform work]. Before undertaking it,” she said, “it would be better to do some educating.”

OMB Circular A-76, which dates to 1966 before being revised, outlines a “formal, complex, and often lengthy process for managing public-private competitions to perform functions for the federal government,” as a Congressional Research Service report phrased it.

After its use was stepped up during the Clinton and George W. Bush administrations, controversy over whether contracting out basic functions saved money resulted in a moratorium that extended through the Obama administration.

In Trump’s fiscal 2018 budget request, the usual language that would extend the moratorium was omitted. In his March 13 executive order on reorganizing agencies for efficiencies, Trump also directed the OMB director to consider “whether some or all of the functions of an agency, a component, or a program are appropriate for the federal government or would be better left to state or local governments or to the private sector through free enterprise.”

Budget Director Mick Mulvaney, while a Republican House Member from South Carolina, said at a July 2016 hearing that he was interested in reviving the A-76 public-private competitions, and Trump’s order gives him latitude to interpret whether certain agency functions are commercial or governmental.

Legislation to enshrine such privatization options was introduced in March by Rep. John Duncan Jr., R-Tenn. The Freedom from Government Competition Act (H.R. 1339) would require a “Yellow Pages” test for every commercial activity undertaken by the federal government. “There is waste in the private sector, but it pales in comparison to waste in government,” Duncan said.  “Every dollar kept in the private sector and away from government will do more to help the economy, create jobs, and hold down prices.”

But objections are already coming from unions. “We will be closely monitoring the budget process and working to ensure that Congress retains the longstanding ban on contracting out federal jobs using the flawed A-76 outsourcing method,” American Federation of Government Employees National President J. David Cox Sr. said in a statement to Government Executive. “Taxpayers benefit when the government’s work is performed by civil service employees, who are less costly and more accountable than private-sector workers.”

Cox cited reports from the Pentagon inspector general and the Government Accountability Office to argue that the A-76 process as run by OMB is “deeply flawed and the impact of its use was disruptive and costly to agency missions.”

Stan Soloway, a consultant who for years headed the 400-member contractor Professional Services Council, wrote in a Government Executive op-ed this January that it is time to “bury A-76,” which was “designed for another era” that failed to take advantage of private-sector innovations.