GOP platform signals possible shift in contractor fortunes

The Republican Party’s view of the Transportation Security Administration and the U.S. Postal Service provide a glimpse of a potential change in federal contracting, should former Massachusetts Gov. Mitt Romney win the White House in November.

In the Republicans’ 2012 party platform, the GOP calls for the private sector to "take over airport screening wherever feasible."

Similarly, “Congress should explore a greater role for private enterprise in appropriate aspects of the mail-processing system,” the GOP adds.

Those positions suggest that the presidential election could change the government’s attitude toward purchasing and how closely agencies work with the private sector, said  Robert Burton, partner at the Venable law firm and a former deputy administrator of the Office of Federal Procurement Policy. Will the Barack Obama administration’s drive for giving more federal work to government employees to do directly stay in place, or will feds compete against companies for the work they’re doing now?

It isn't a new question, however. To insource or outsource has been the question for years.

Two months after Obama became president in 2009, he released a presidential memo turning federal procurement 180 degrees from the direction in which President George W. Bush was marching. The Bush administration’s theme was competitive sourcing, in which the public sector and private sector vie for certain government work. Obama said that push had gone too far.

“The line between inherently governmental activities that should not be outsourced and commercial activities that may be subject to private sector competition has been blurred and inadequately defined,” Obama wrote in his March 4, 2009, memo.

On the legislative side, Congress had undertaken a similar effort. Appropriations bills essentially condemned competitive sourcing. On the other hand, the bills allowed departments to review jobs that were contracted to the private sector. If appropriate, the agency could take back the work if the federal employees could do it better and cheaper.

The fiscal 2009 Omnibus Appropriations Act, which Obama signed soon after releasing his memo, prevented agencies from engaging in new competitive sourcing projects. The law also required agencies to establish guidelines for bringing back government work currently being performed by private contractors.

Since then, officials have pushed for clear lines between contractors and federal employees, as agencies pull more work in-house. The Obama administration told officials to not let contractors conduct inherently governmental functions, or jobs that only federal employees should do, such as conducting a criminal investigation. They should also be very wary of giving companies work that is even closely associated to inherently governmental functions. Furthermore, Obama introduced a new category of work, which further divided contractors from federal work. The critical function is work that is “necessary to the agency being able to effectively perform and maintain control of its mission and operations,” as the Office of Federal Procurement Policy defined it in 2011. Administration officials wanted to have enough knowledge in the government workforce to not be overly reliant on the private sector.

Now though, experts say the pendulum could swing the opposite direction if Republicans gain control of the White House or Congress.

“A Republican president and at least one house of Congress controlled by the Republicans would bring a strong likelihood of outsourcing coming back to the forefront of the management debate,” said Larry Allen, president of the Allen Federal Business Partners.

If the nation chooses Romney, Allen said the government would begin outsourcing more federal work, especially where there is either the perception or reality that a government function competes with the private sector.

Nevertheless, under competitive sourcing, federal employees have a winning record. According to a Competitive Sourcing Update published in 2007 by OMB’s Office of Federal Procurement Policy, employees won 87 percent of the work competed in fiscal 2006. Between fiscal 2003 and 2006, they won 83 percent of them.

But federal labor unions foresee a bleak future with a Republican-led White House, based on the GOP platform.

“As this platform makes clear, a Romney-Ryan administration would arbitrarily downsize the federal workforce, dismantle Medicare and Social Security, [and] outsource our national security to profit-driven private sector companies,” J. David Cox Sr., national president of the American Federal of Government Employees, said Aug. 27.

In other words, he added, “The GOP platform makes ‘government’ out to be a dirty word.”

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

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