A-76 is a tough sell for OMB

Competitive sourcing has become an even tougher sell on Capitol Hill now that lawmakers attribute the unsanitary conditions at the Walter Reed Army Medical Center’s Building 18 to an exodus of federal workers after a private company took over maintenance work.

Paul Denett, administrator of the Office of Management and Budget’s Office of Federal Procurement Policy, must persuade lawmakers that the policy is  a good one, despite their outrage about conditions at Walter Reed’s outpatient facilities.

Competitive sourcing pits federal employees against the private employees in job competitions regulated by OMB policy, known as Circular A-76. About 6,680 federal employees who do work similar to that performed in the private sector had their jobs put up for public/private competitions in fiscal 2006.

At a May 3 briefing on OMB’s latest competitive sourcing results, Denett said he expects more restrictions from Congress in stand-alone bills and appropriations bills.

“Our legislative affairs people are coming back with almost a constant flow” of restrictive proposals, Denett said. The fiscal 2008 Defense appropriations bill, for example, includes a provision that prohibits competitive sourcing for medical support activities. “This is a fallout from Walter Reed,” he said.

OMB’s report on competitive sourcing results shows that public/private competitions conducted in fiscal 2006 could save about $1.3 billion in the next five to 10 years. But Denett could have a hard time convincing lawmakers that competitive sourcing improves government operations and saves money. 

Rep. Edolphus Towns (D-N.Y.), chairman of the House Oversight and Government Reform Committee’s Government Management, Organization and Procurement Subcommttee, said some lawmakers want to put limits on competitive sourcing because there are too many examples of competitions that have failed, including Walter Reed.

“How does OMB account for messes like that when figuring out how much money was saved?” Towns asked. “Lowering costs by cutting quality is no savings at all.”

OMB’s report cited many positive examples of competitive sourcing. For example, the Army Corps of Engineers completed a public/private competition that Denett said will transform how it manages information and provides IT support services.

“It’s those…that are threatened by many of the constraints that Congress is sliding into various appropriations bills,” Denett said.

Union reaction

The oversight subcommittee’s ranking member, Rep. Brian Bilbray (R-Calif.), said managed competition guarantees benefits for taxpayers. However, many policy experts say they hold out little hope for changing many legislators’ minds.

Colleen Kelley, president of the National Treasury Employees Union, said many members of the Democratic-led Congress support further restrictions. They want contractors held accountable for their work and are setting up new oversight procedures.

Kelley said the basic problem is that the administration’s competitive sourcing goals exceed any realistic analysis of how to restructure work, and she does not believe Walter Reed is an exception. “They are making it a much prettier picture than it is,” she said.

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