Competition quotas stripped

Appropriations language makes it harder for administration to outsource federal jobs

Congress has undermined the Bush administration's drive toward outsourcing more government work by striking a proposed target number from the fiscal 2003 budget.

The administration had set a goal to compete 15 percent of their commercial jobs by the end of 2003. Opponents of the quotas in both houses of Congress instead pushed through a measure to restrict the use of funds to establish such target numbers.

The administration did not set a target in its fiscal year 2004 budget request, according to policy analysts. The President's Management Agenda, released two years ago, spells out Bush's vision for privatizing much of the work that federal agencies currently carry out. The agenda included a 5 percent competition goal for 2002 and 15 percent for 2003.

Congressional opponents, primarily Democrats, worry that the effort will cost federal jobs and have lobbied to rein in the administration. The measure in the 2003 budget does not set limits on outsourcing, but it forbids the use of any specific target or quota unless the quota is supported by research. Hard-line opponents, including Rep. Jim Moran (D-Va.) and Sen. Barbara Mikulski (D-Md.) had urged a total ban on quotas.

The measure that finally passed is "a whole lot of nothing," said Jennifer Park, a legislative assistant in Moran's office. The original language in Mikulski's amendment to the appropriations bill, modeled on a budget amendment Moran created last summer, "was very simple, very to the point," she said. Sen. Craig Thomas (R-Wyo.) amended Mikulski's proposal to add the potential loophole.

Mikulski, in a January statement that she delivered on the Senate floor opposing the quotas, expressed her fears for the federal workforce. "The Office of Management and Budget has issued a directive calling for bounty hunters in federal agencies to get rid of 850,000 jobs over the next three years," she said. "That is nearly half of the federal workforce. Managers will be forced to meet arbitrary targets, sometimes against their will or even their better judgment."

Thirty-five Senate Democrats wrote to OMB Director Mitchell Daniels Jr. last month expressing that fear, a move echoed by House Democrats this month.

Daniels said the targets were "stretch goals" and difficult for agencies to meet. "But we have to get the process flowing," he said. "We have to have some way to measure the progress. If we don't get a measurement, we won't get the results."

Congress' action is not a significant roadblock, he added. "I don't think that stripping the goals from the '03 budget will have an impact on the rate competitive outsourcing is adopted."

Advocates and opponents of outsourcing alike say that in not naming a target for 2004, the administration is changing its methods, but not backing off its intent to open jobs to competition.

"Quotas or no quotas, outsourcing is still going to happen. This administration has made it clear that's their desire," said Larry Allen, executive vice president of the Coalition for Government Procurement, which is composed of private-sector firms. "It seems to be one of the major issues on the President's Management Agenda, and I don't see the lack of quotas changing that."

Federal unions, however, also worry about workforce changes.

"The only time contracting out should be done is if they can prove there's going to be significant savings for the taxpayers," said Randy Erwin, assistant to the president at the National Federation of Federal Employees. "If they can't prove that, there's no reason it should be done. To put quotas on, it's privatizing for no reason at all."

The American Federation of Government Employees objects to the arbitrary nature of quotas, said Wiley Pearson, its defense policy analyst. "You don't look toward the fact that, rhetoric aside, nobody has been able to prove that privatization gives you better service, better accountability or generates real savings."

In reality, argued consultant Robert Guerra, privatization is not likely to put feds on the street. "Somebody has to do this work," he said. "They'll be elsewhere in government or they'll be working for the companies doing the outsourcing work."

Studies have shown that agencies can save 25 percent or more on their costs just by considering outsourcing, said Stan Soloway, president of the Professional Services Council. Administration officials have cited a 30 percent figure.

"The very introduction of competition drives higher efficiency and competence," he said. "In the absence of competition, organizations get stale."

Matthew French contributed to this article.

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