Should the government be privatized?

Once again Congress has introduced legislation to encourage more "contracting out" by the federal government.

The Freedom From Government Competition Act (H.R. 716) is the latest in a string of futile attempts to "privatize" government. The bill would require the government to procure from the private sector with some exceptions the goods and services it needs to carry out its functions.

With our economy booming and unemployment at record low levels you would think the private sector would not need or want legislation to boost sales. Nor would you think that Congress would be interested in further stimulating the private sector. But Congress is inscrutable.

The General Accounting Office recently testified on this proposed legislation and identified six ingredients necessary for success:

* Committed political leaders to champion the effort.

* An organizational and analytical structure to implement it.

* Legislative changes and/or reduced resources for government agencies to encourage greater use of privatization.

* Reliable and complete cost data on government activities to assess their performance to support informed privatization decisions and to make these decisions easier to implement and justify.

* Strategies to help federal workers make the transition to a private-sector environment.

* Enhanced monitoring and oversight to evaluate compliance with the terms of the privatization agreement and performance in delivering services.

If GAO had been honest it would have simply pointed out that none of these conditions can be met and efforts to privatize federal government activities should be abandoned. However GAO never speaks that bluntly.

It has been executive branch policy for more than 30 years to encourage competition between the federal work force and the private sector for providing commercial goods and services. However this policy has been embodied only in the Office of Management and Budget's Circular A-76.

H.R. 716 as currently drafted requires OMB to issue regulations and to establish a new Center for Commercial Activities, which would implement the requirements of the legislation ensure compliance by agencies and provide guidance information and assistance to the private and public sectors.

The bill gives OMB wide latitude as to what regulations it will issue. This affords OMB flexibility in implementing the legislation. But GAO noted quite correctly that "given the wide latitude that OMB is afforded by the bill issues will inevitably arise during implementation that will have to be dealt with by OMB."

These issues could include such questions as whether government corporations, federally funded research and development centers, state governments or even the U.S. Postal Service should be included within the definition of "private-sector sources" and thus be eligible to compete for the government's contracts, whether public buildings would need to be sold to the private sector in order to house federal employees and how OMB will incorporate congressional views when significant or highly sensitive conversions are proposed.

Given concerns such as these GAO said Congress will need to oversee OMB's performance. Of course Congress has been overseeing OMB for as long as OMB has been in existence. Have you noticed any impact?

GAO said the strategic and annual performance plans and annual report that OMB must produce under the Government Performance and Results Act could provide a mechanism for such accountability. It said OMB could include in its strategic plan a strategy and objectives for implementing the bill's requirements.

In addition OMB - through its annual performance plan - could provide a schedule for changing policies and systems to accomplish the bill's purposes.

In a shameful effort to curry favor with OMB, GAO noted that OMB will require additional resources or will need to re-allocate existing resources from other mandated responsibilities to effectively carry out the role envisioned for it under the bill.

GAO reported in 1995 that it was concerned about OMB's capacity to carry out its already numerous management responsibilities, which have been expanded significantly in recent years. Give me a break. Now why would anyone think that OMB, which has been responsible for circular A-76 all these years, would have any more luck or interest implementing H.R. 716?

In my opinion, all the details are irrelevant. The question is, should the federal government be privatized? If the answer is no, why go any further? This legislation has no chance of passing. And even if it did it, wouldn't make a bit of difference.

Bureaucratus is a retired federal employee who contributes regularly to Federal Computer Week.


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