Congress faces sourcing rules

Congressional challenges to the rules controlling the competitive sourcing of federal jobs are mounting as both Senate and House members crafted language to revamp the bidding process.

Rep. Chris Van Hollen (D-Md.) plans to introduce an amendment by Sept. 21 to the House Treasury and Transportation appropriations bill that would prevent those departments from using the revised A-76 circular, which contains guidelines for competitive sourcing. The bill passed the House Appropriations Committee Sept. 14.

In a letter circulated to his colleagues, Van Hollen said Office of Management and Budget officials should adopt changes to the circular already proposed in the still-unreconciled House and Senate versions of the fiscal 2005 Defense Department authorization bill. Language in both bills would prohibit awards to military contractors contributing less to employee health insurance premiums than the government contributes — a standard that industry representatives have argued is unfair.

Van Hollen also said unions should be allowed to file Government Accountability Office contract award protests on behalf of individual workers. Only companies can contest A-76 outcomes based on allegations of procedural fouls. The Senate's Defense Authorization bill has an amendment that would permit those protests for individual workers; Van Hollen wants it adopted for all federal agencies. Supporters said the measure has a good chance of becoming law as similar language is included as a "Sense of Congress" in the House version.

The Maryland congressman also calls for the governmentwide adoption of a provision restricting competitive sourcing that was part of the DOD appropriations act passed last month. The measure prevents DOD from contracting work performed by at least 10 government workers unless the private-sector bid will save more than 10 percent of the personnel-related costs of the government's most efficient organization bid or $10 million, whichever is less. The OMB threshold for application of the "10 percent rule" required 65 full-time equivalent positions to be effected.

An identical provision in the House's Treasury appropriations bill caused the Bush administration to issue a veto threat before the language was removed by Republican lawmakers this week under a point of order maneuver on the House floor.

If Van Hollen's amendment is adopted by Congress, a veto might likewise ensue from President Bush.

"Prohibiting funding for public/private competitions is akin to mandating a monopoly regardless of the impact on services to citizens and the added costs to taxpayers," stated a Sept. 14 White House statement of administration policy.

In Congress' other chamber, Sen. Barbara Mikulski (D-Md.) successfully attached a rider to the Senate Transportation, Treasury, and General Government appropriations bill earlier this month. Her amendment would undo OMB's May 2003 rewrite of Circular A-76, the handbook that governs competitive sourcing rules.

"It sends the administration back to the drawing board to come up with new guidelines for competitions that are truly fair," she said in a statement.

Her amendment language would prohibit any federal agency from using fiscal 2005 funds to implement competitive sourcing studies under the revised circular.

As one of five initiatives on the President's Management Agenda, competitive sourcing encourages agencies to cut costs by forcing federal employees uninvolved in core government functions to compete a "most efficient organization" strategy against private-sector bids to do the same work. Mikulski said the revised circular gives an unfair advantage to private-sector contractors.

The bill has been approved by the Senate Appropriations Committee but must still clear the Senate floor.

About the Author

David Perera is a special contributor to Defense Systems.

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