Two views on competitive sourcing

A hot issue — public-private competitions for federal work — for federal contractors and for politicians on both sides of the aisle isn’t going to get less controversial. But its direction could change dramatically.

Massachusetts Sen. John Kerry (D) would likely reduce the number of public-private competitions if he were to win the presidency, many experts said.

“I think you [would] see congressional amendments [curtailing the competitions] getting more play, and the number of competitions dialing back,” said Geoffrey Segal, director of government reform at nonpartisan think tank Reason Public Policy Institute of Los Angeles.

For President George W. Bush, Segal said, the question is: Will his public-private competition initiative, called competitive sourcing, remain a centerpiece of his second-term agenda?

Under rules laid out in Office of Management and Budget Circular A-76, competitions require government workers who perform commercial functions to compete with private-sector contractors for their jobs.

Federal employee unions and their supporters in Congress have strongly opposed competitive sourcing.

“I do believe you will see some changes to the process, based on the amount of opposition,” Segal said. “They are going to have to do something to at least mitigate the opposition.”

For example, the Bush administration might require better reports from agencies on the costs and results of their public-private competitions, he said.

Federal union officials, however, said the Bush administration’s emphasis on competitive sourcing isn’t going to lessen, and might even be ratcheted up a notch during a second term.

OMB “would surely become even more heavy-handed in establishing and enforcing numerical privatization quotas on agencies [for the competition of jobs],” said Jacque Simon, public policy director for the American Federation of Government Employees, which represents 600,000 federal and District of Columbia government workers.

In contrast, Simon expects that should Kerry be elected president, he would scale back or even abolish competitive sourcing. “Sen. Kerry has told our members that he would ‘terminate the Bush administration’s radical plan to privatize hundreds of thousands of federal employee jobs,’ ” Simon said.

But Chris Jahn, president of Contract Services Association of Arlington, Va., isn’t so sure Kerry could deliver on this promise. Kerry, who has pledged to reduce the federal deficit and balance the budget, might discover he would need the savings generated by the competitions, Jahn said.

CSA represents 300 companies that provide services to federal, state and local government agencies. “There is a risk that he’ll scrap the whole thing,” Jahn said. “But you’re talking about competing 800,000 positions at a time when we have huge deficits.” If all those jobs were competed and resulted in a typical 15 percent to 20 percent savings from performing the work more efficiently, the government could save $10 billion annually over time, Jahn said.

“I don’t think that can be ignored,” he said. “Bush has put more political capital behind competitive sourcing, but I find it hard to believe Kerry would turn his back on this process.”

Kerry might not abandon public-private competitions entirely, but he has pledged to cut the number of contractors employed by the federal government.

In his acceptance speech at the Democratic National Convention, Kerry said he would cut 100,000 federal contractor jobs, but has not offered a plan for accomplishing that.

Kerry drew the 100,000 figure from a Progressive Policy Institute report that called for cutting 150,000 contractors to save $67 billion over 10 years, said Paul Weinstein Jr., chief operating officer of the Democratic think tank in Washington. The institute’s February report, “A Return to Fiscal Responsibility,” also recommended a 10 percent cut to the federal workforce to save $39 billion over 10 years.

The institute did not recommend cutting any defense or homeland security jobs.

“The fiscal problem we are in right now is so severe that we are going to have to cut a little bit from everywhere to start paying down the debt,” Weinstein said.

Colleen Kelley, national president of the National Treasury Employees Union, said she’s pleased that Kerry would consider cutting the contractor workforce. NTEU represents 150,000 federal workers in 30 agencies.

“I don’t know if 100,000 contractors is the right number,” Kelley said. “What I support is that Kerry is going to look at this. Because there is not as much oversight of contractors as there needs to be, there could be savings there.”

What the PPI study really addressed was cutting out government work that no longer needs to be done, said Stan Soloway, president of the Professional Services Council of Arlington, Va. It’s a position he doesn’t oppose. “If you identify work that is contracted that no longer needs to be done, it shouldn’t be done,” Soloway said.

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