November 13, 2003

Hill negotiators agree to revamp job competition process

By Amelia Gruber

Members of a House-Senate conference committee have agreed on a measure that would make it easier for federal employees to compete against private firms for their jobs.

Language adopted by members of a conference committee on the fiscal 2004 Transportation-Treasury appropriations bill Wednesday night gives employees the right to regroup into teams called "most efficient organizations" and participate in public-private competitions where more than 10 jobs are at stake. Under the provision, agencies cannot award a project involving more than 10 positions to a contractor unless an in-house team submitted a bid.

A contractor's bid would need to cost 10 percent or $10 million less - whichever is the lower dollar amount - than the agency's proposal in order to win.

OMB's May 2003 revision of Circular A-76, which governs public-private job competitions, lets agencies decide whether to allow in-house teams participate in competitions involving fewer than 65 positions. Under the administration's rules, in-house teams do not get a cost advantage in such competitions.

Federal employee unions hailed the conference report. Conferees "effectively eliminated the so-called streamlined competition" provided for in OMB's A-76 revisions, said Colleen Kelley, president of the National Treasury Employees Union.

In addition to altering the rules on streamlined competitions, the conference report gives in-house teams the right to appeal agency job competition decisions to the General Accounting Office. The teams can select a representative to file a protest on their behalf.

This provision would effectively allow unions to protest A-76 studies at every step of the way, said Stan Soloway, president of the Professional Services Council, an Arlington, Va.-based contractor association. "Those four sentences [describing the right of in-house teams to appeal] are the death knell for competitive sourcing and are shocking, unnecessary and inequitable."

Soloway argued that employee representatives have nothing to lose by persistently protesting A-76 decisions. "You can protest the solicitation, you can protest modifications of the solicitation . . . what happens is, it makes the process so unbearably long and expensive" that private companies will not participate, he said. Protest rights should not be granted to "any individual who has no responsibility for the performance [of a function]," he said.

Soloway said he does not believe the conferees are aware of the implications of the agreement. There may still be some time for the committee to make a change before filing the final conference report, he said. But Capitol Hill sources indicated that negotiations are finished.

The House-passed version of the appropriations bill contained language that would have completely unraveled OMB's A-76 revisions. Introduced by Rep. Chris Van Hollen, D-Md., and approved by a vote of 220 to 198, the provision would have forced agencies to play by the old job competition rules until OMB wrote new guidelines satisfying a broad spectrum of interested groups.

The White House threatened to veto the entire Treasury-Transportation bill over Van Hollen's language. A similar provision was defeated in the Senate by one vote, but Senators accepted compromise language offered by Sens. George Voinovich, R-Ohio and Craig Thomas, R-Wyo.

Conferees also dropped a provision in the Senate version of the Transportation-Treasury bill that would have required agencies to consider quality before cost when awarding engineering and architectural contracts. Steve Hall, director of government affairs for the American Council of Engineering Companies, said he was disappointed in that move.

But Hall said he is pleased the compromise will allow public-private competitions to move forward. Hall also applauded reporting requirements in the conference report. Conferees decided that agencies must share details on jobs competed, money spent on A-76 studies, anticipated savings and other aspects of their competitive sourcing initiatives, with lawmakers on an annual basis.