Workforce issues creep into LOB debate

Platts questions whether A-76 rules need to be modified

Labor issues are creeping into the debate over the Office of Management and Budget’s Lines of Business Consolidation initiative.

Rep. Todd Platts (R-Pa.), chairman of the Government Reform Subcommittee on Government Management, Finance and Accountability, asked OMB controller Linda Combs earlier this month whether the administration is planning any changes to Circular A-76—which details how agencies should compete inherently commercial tasks against the private sector—as it urges agencies to consider turning over their financial-management systems to public or private centers of excellence.

“If OMB Circular A-76 is to be discarded or changed for the purposes of this initiative, will the alternative process or the changed A-76 circular be consistent with the laws established to require public-private competition before conversion to contractor performance?” Platts wrote to Combs late last month.

Platts also asked Combs to describe any potential changes to A-76 because of the LOB initiative.

An OMB spokesman said the administration received the letter and will respond by April 21.

OMB’s consolidation initiative has attracted the attention of the government’s employees’ unions.

John Threlkeld, a legislative representative and lobbyist with the American Federation of Government Employees, said Platts’ questions are relevant because there are still considerable uncertainties about how the LOB initiative will affect the government workforce.

“There seems to be a lot of reasoning that [signing up with a COE] is presumed to be more efficient” than retaining these functions in house, Threlkeld said. “There’s billions of dollars at stake, and it’s not clear how thoughtfully [OMB] has worked this through.”

Under the LOB concept, agencies are encouraged to consider signing over certain non-mission-specific functions, such as human resources and financial management, to both public and private COEs.

During a recent hearing, Platts focused particularly on the 1932 Economy Act, which governs how agencies procure services from one another. Under the act, shared-services providers can only charge customer agencies for services provided and cannot spend funds they don’t have.

The act could leave public COEs at a significant disadvantage, because some would not be able to easily invest in capital improvements as the private sector does.

“I’d think this is a huge issue,” Platts said, questioning Combs and Karen Evans, administrator of the Office of E-Government and IT.

This “will create an inequity between” the private and public COEs, he said.

In response, Combs said OMB was keeping all its options open for finding ways for public COEs—such as the Interior Department’s National Business Center, and the Health and Human Services and Agriculture departments—to compete.

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