Study finds $70 billion in possible outsourcing

OMB Circular A-76 (revised)

The government's push to open federal jobs to competition could open as much as $70 billion outsourcing opportunities to private firms, but lingering uncertainties on the final version of the rules make it more difficult to predict, according to a new report from research firm Input.

Researchers considered the number of jobs that could be outsourced — officials have estimated that almost 900,000 federal jobs could be suitable for outsourcing — and Bush administration officials have said they want agencies to open half of those to competition by September 2004. Based on those figures, Input calculates that competitive sourcing could bring up to $70 billion to vendors, including up to $5 billion for information technology companies, if all the potential jobs are outsourced.

According to Input, the chief unknown factor is in the omnibus spending bill being debated in Congress. Although members rebuffed many legislative efforts to forestall competitive sourcing altogether, the omnibus bill -- created when Congress combined several appropriations bills into one -- will create several sets of standards if passed as written. It includes different rules for different agencies covered under the omnibus, and some agencies are covered by other bills.

The House has passed the bill, but the Senate will not consider it until next year.

If the bill passes, according to Input:

* The Transportation and Treasury departments, along with the General Services Administration and the Office of Personnel Management, would be subject to an amendment that forbids outsourcing of federal work overseas unless it was previously performed by federal employees overseas.

* The Defense Department must complete its competitions within 24 months for single-function work and 30 months for multifunction activities.

* The Forest Service has a 2004 spending limit for $5 million for competitive sourcing activities.

* The Energy Department has a limit of $500,000.

* Agriculture Department jobs related to rural development or farm loan programs are exempt from competitions.

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