What's going on?

Well into its fourth year, the Office of Management and Budget's (OMB) controversial privatization initiative received in early March another tough report card from the General Accounting Office (GAO): Greater Emphasis Needed on Increasing Efficiency and Improving Performance. While laboring under its own biases, the GAO report reveals that OMB is still racking up failing grades in its unprecedented efforts to privatize the civil service.

Regardless of your terminology-quotas, targets, or goals-OMB is still directing agencies to review work for privatization, irrespective of the needs of taxpayers and customers. As GAO put it, "OMB's revised goals continue to emphasize process milestones such as competitions completed more than enhancing value through performance improvements and efficiencies."

Desperate for good news, contractors have seized upon GAO's determination that "all agencies reviewed have made progress in developing their `competitive sourcing' infrastructures." After three years, one would hope some progress had been made. Moreover, one must ask why agencies are tasked with completing arbitrary numbers of privatization reviews when they still have inadequate infrastructures.

Contractors should have kept on reading, however. GAO also reported that, "Officials in most of the agencies reviewed expressed concern that they lack sufficient staff to perform the additional tasks included in the recently revised Circular A-76…Funding their competitive sourcing programs also has been cited as a challenge for agencies."

Although GAO reported that OMB had told agencies to ask the Congress for the funding necessary to pay for privatization reviews, Clay Johnson, OMB's deputy director for management, recently told Federal Times that "OMB plans to stay the course and urge managers to find funding from their existing cash flow…" This, of course, is code for agencies "must steal from their budgets to meet OMB's privatization targets," as in "the Department of Veterans Affairs should divert money from patient care to pay off privatization consultants."

Much attention has been given to how the GAO report toted up wins and losses. Contractors had earlier bragged that the privatization process would be rewritten so much in their favor that they might win 90% of the privatization reviews conducted under the new A-76. They were wrong. Close enough for contractor work, we guess.

However, given that GAO does not distinguish the results between the previous and the current editions of OMB Circular A-76 and there is so little experience with the new standard competition process, the report is unhelpful in assessing the fairness of the revised circular.

The new A-76 has been found so one-sided that more than one-half of all Congressional lawmakers have voted to defund it, thanks to AFGE Activists who lobbied so aggressively last year on the Van Hollen and Mikulski Amendments to the Transportation-Treasury Appropriations Bill. And for contractors who are envious of federal employees' high winning percentages, just imagine how many reviews we would win under a fair competition process: if we had the same appeal rights as contractors; if we could always submit our most competitive bids; if we weren't unfairly burdened by an excessive overhead rate; and so on.

Given our obvious skill and industry, when will OMB give federal employees opportunities to compete for new work and contractor work? Contractors have acquired almost all of their work without public-private competition and with infrequent private-private competition. So why does OMB insist on forcing taxpayers to subsidize sluggish and inefficient contractor monopolies when there are reliable and experienced federal employees ready to serve the American people?

What's OMB's explanation for federal employees trouncing contractors under a process that was designed to give contractors one break after another? Mr. Johnson told Federal Times that, "People in agencies know the work, they are motivated to keep the work, and it suggests they know how to do it effectively."

So why does OMB insist that "competitive sourcing" is the only tool for making agencies more efficient?

Why not encourage agencies, managers and employees alike, to use whatever works best, reorganizations, consolidations, labor-management partnerships, and any other options that aren't burdened with the significant costs and controversies of A-76 privatization reviews and bad contract oversight?

Agencies are obligated to taxpayers and customers to achieve their most efficient organization every day, regardless of whether a privatization review is underway. If some managers will strive to achieve even greater efficiencies only when faced with the prospect of wasteful and wrenching privatizations, then the solution is clear: get better managers!