OMB asks agencies for A-76 costs and savings

Federal agencies must start keeping detailed records of costs and savings from competitive sourcing, which is the practice of putting certain federal jobs up for bid.

The Office of Management and Budget issued a memo April 13 that asks agencies to log cost and performance data and present independent validation of that data to help OMB determine if the government is meeting the objectives of Circular A-76, the policy document that authorizes competitive sourcing.

“These are critical steps to ensure the long-term success of the competitive-sourcing initiative,” Clay Johnson, OMB’s deputy director for management, wrote in the memo.

The Bush administration, a strong proponent of competitive sourcing, is looking for ways to institutionalize the practice beyond 2009, when the Bush presidency will end.

Agencies must document procedures for phasing in service providers, the phase-in costs and the cost of the services. OMB needs fiscal year savings and performance information so it can compare actual costs with cost estimates, the memo states.

OMB also asked agencies to submit an independent validation of their A-76 data, which their inspectors general could provide.

By July 31, agencies must have a plan for ensuring the validation of a reasonable sampling of A-76 competitions. They must also have a schedule for identifying the competitions that will be validated and a time frame for conducting those validations, the memo states.

Competitive sourcing could save about $7 billion in the next five to 10 years, based on competitive decisions made to date, OMB’s memo states.

Administration officials say they are concerned about whether competitive sourcing will survive under a Democratic-led Congress. “I know that with Democrats in power…I’ll have more questions questioning the wisdom and worth of competitive sourcing,” said Paul Denett, administrator of the Office of Federal Procurement Policy.

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