Denett expects to defend competitive sourcing

The incoming Democratic-led Congress will take on the competitive sourcing initiative with the Office of Management and Budget, said Paul Denett, administrator of the Office of Federal Procurement Policy, who expects to be called to Capitol Hill early next year to defend it.

“I know it’s awkward, I know it’s controversial, I know that with Democrats in power come January I’ll have more questions, questioning the wisdom and worth of competitive sourcing,” Denett said in a speech today at the Government Contract Management Conference, hosted by the National Contract Management Association.

Competitive sourcing is governed by OMB’s Circular A-76 and typically pits a private-sector vendor against a team of federal employees, or the most efficient organization, to get the best deal for a project. OMB has pushed the initiative as a way to save money.

Democratic and Republican lawmakers are still skeptical. They are not convinced the savings that OMB’s reports to Congress and attributes to the competitions actually result from them. Lawmakers also have limited how agencies can use competitive sourcing by capping spending on the practice and establishing qualifiers on aspects of it.

Denett nevertheless plans to go to Congress to discuss the initiative and try to get legislators to ease the restrictions.

He reiterated the numbers in the OMB reports, saying savings estimates come to $5.6 billion over the next five to 10 years because of competitive sourcing done between fiscal 2003 and 2005. He also estimated that $4 billion in savings would come if agencies competed half of their contracts.

“I am an administrator that actually was in an office that did one of these,” he said, referring to his time at the U.S. Geological Survey. “I know firsthand how awkward it is…but it’s the right thing to do.”

Denett told members of the audience he hopes they will remain visible as the issue gets more scrutiny from Capitol Hill.

No date has been set yet for him to testify before Congress on the issue, he said.

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