Omnibus bill halts competitive sourcing

Competitive sourcing, one of the Bush administration's most controversial government reform policies, could be coming to an end.

The 2009 omnibus appropriations bill, which passed the Senate on Tuesday, includes a provision prohibiting the use of funds governmentwide to study or hold a public-private job competition for the remainder of fiscal 2009. Sen. Richard Durbin, D-Ill., and Rep. Jose Serrano, D-N.Y., introduced the measure.

Although the omnibus halts job competitions through the end of the fiscal year on Sept. 30, it does not kill competitive sourcing, which would require further legislation.

The bill also requires civilian agencies to review current contracts and issue guidelines for considering whether new projects can be performed by federal employees, or if previously outsourced work can be brought back in-house.

Criteria for jobs subject to insourcing include: those outsourced without competition or performed by a federal employee during the past decade, jobs closely aligned with an inherently governmental function, or judged by a contracting officer to have been performed poorly "because of excessive costs or inferior quality." The provision does not apply to Defense Department contracts.

President Barack Obama is expected to sign the bill.

Job competitions have been held for several decades, primarily at the Defense Department, through the Office of Management and Budget's Circular No. A-76 process. But it was only during the past eight years -- through the Bush administration's competitive sourcing initiative -- that agencies were encouraged to find federal jobs that could be competed with the private sector.

From the outset, the competitions were unpopular with government labor unions and congressional Democrats who argued the program not only threatened federal jobs, but also failed to produce results.

Competitive sourcing is designed to drive cost savings and efficiency by requiring agencies to put up for competition with contractors jobs that could be performed commercially, and then determine which organization can accomplish the work most economically. The idea is that the government will save money even if the federal team receives the contract because the competitions would force agencies to streamline their operations.

The Bush administration credited its competitive sourcing initiative with saving roughly $7 billion in government efficiencies from 2003 through 2008. The unions, however, disputed that figure, arguing that the administration embellished its savings, in part by failing to account for the planning costs of the competitions.

While the omnibus is likely the final nail in the coffin of competitive sourcing, the program had been suffering a slow death since Democrats assumed control of both chambers of Congress in 2006.

In the past several years, Congress has passed legislation that excluded health care and retirement benefits from the cost comparison process, established protest rights for federal teams on the losing end of competitions, and halted all new competitions at nine key agencies.

In 2008, Congress tried unsuccessfully to suspend job competitions for one year at civilian agencies and three years at Defense.