Union objects to IRS outsourcing move

OMB Circular A-76

A union of federal employees fears that the government may ignore provisions in new outsourcing guidelines, allowing many jobs to be outsourced without allowing federal employees to compete for them first.

The new rules, the Office of Management and Budget's Circular A-76, eliminated the process of "direct conversion," under which agencies could declare that some jobs were suitable for outsourcing and not open them to competition. The revised circular, published May 29, instead requires a streamlined competition process for activities involving 65 or fewer full-time equivalent positions.

OMB has the authority to grant exceptions to the requirement, but the National Treasury Employees Union believes that the agency may become too lenient. In a June 12 letter to Office of Federal Procurement Policy administrator Angela Styles, NTEU president Colleen Kelley pointed to an Internal Revenue Service procurement as an example.

IRS is outsourcing the order entry telephone work in the distribution centers from which the agency mails tax forms, manuals and schedules. The 176 full-time equivalent jobs are people who take orders for the documents. IRS requested to use direct conversion and Styles granted them permission, according to Kelley.

"I strongly urge you to stand by your public statements regarding the elimination of direct conversions and deny any special treatment for agencies that would allow them to privatize federal employee jobs without first conducting a public/private competition," she wrote.

An IRS spokeswoman confirmed that the agency is seeking to use direct conversion to outsource the jobs. No one at OMB could be reached for comment.

Stan Soloway, president of the Professional Services Council, said no one should be alarmed if direct conversions take place now and then under the new circular.

"If they make a business case, and Angela approves it, they can do it. OMB does have the authority say yes, you can do it," he said. "That used to be at the discretion of agency. Now it's at the discretion of OMB."

Soloway said he does not expect to the see the exemptions granted often. "OMB today has talked a much tougher talk on direct conversion than OMB of the past," he said.


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