Styles defends A-76 rules

OMB Circular A-76

Angela Styles, administrator of the Office of Federal Procurement Policy, staunchly defended the Bush administration's competitive sourcing policy at a congressional hearing Thursday morning.

The new Office of Management and Budget Circular A-76 sets rules for determining when federal jobs are commercial and could be open to private-sector competition, and when they are inherently governmental. The Circular, finalized May 29, replaces the older process that agencies largely shunned, calling it unwieldy and too time-consuming.

Opponents are concerned that the rules will cost thousands of federal jobs and dampen employee morale. The policy's advocates say it will lead to lower costs — whether the commercial sector or federal employees win the competitions — and greater accountability.

"It's a hard pill for people to swallow, but we really don't care if the job is done by the public [sector] or the private sector," said Styles, one of the architects of the revised A-76 rules, while testifying before the House Government Reform Committee.

The administration wants agencies to open at least 15 percent of their eligible jobs to competition by next summer. Styles said that number is a goal, and not all agencies will attain it.

The whole idea of outsourcing has raised fears, especially among federal employee unions, that hundreds of thousands of federal workers could be displaced as they lose competitions to private sector companies. However, many displaced workers are nearing retirement age and could take early retirement, while contractors hire others, according to Styles and other A-76 advocates.

Despite those assurances, Comptroller General David Walker admitted that some federal workers will lose their jobs. "There's no question there's going to be a decline in the federal workforce as a result of these competitions," he said.

Rep. Tom Davis, (R.-Va.), committee chairman, expressed concern about the morale of federal workers. He said that people who wonder if their jobs are going to be on the line every few years might not deliver good work.

"You do have to be concerned about the hidden cost," Walker said. It is difficult to quantify intangibles such as lowered productivity, he said.

Styles, however, said competition should be a positive force in government. "It's a morale boost to employees when they win, and they win more than 50 percent of the time," she said.

Her remark referred to figures compiled by the Commercial Activities Panel between 1997 and 2001 in the Defense Department, the only department that has made extensive use of A-76 so far. The numbers show that federal workers won 60 percent of the standard cost comparisons and 98 percent of the streamlined cost comparisons that the panel examined.

Rep. Henry Waxman (D.-Calif.), the ranking minority member on the committee, said the revised Circular A-76 is part of a long chain of Bush administration actions hostile to federal workers. "This administration has virtually declared war on federal employees," he said.

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