July 11, 2008

The Senate Appropriations Committee has joined its House counterpart in passing legislation that would suspend all new competitive sourcing activity.

The Senate panel passed the one-year moratorium on public-private job competitions on Thursday as part of the $44.8 billion fiscal 2009 Financial Services and General Government Appropriations bill. The provision essentially would leave it to the next presidential administration to continue the program, which opens jobs that traditionally have been performed by federal employees to bids from contractors.

The House Appropriations Committee passed an identical measure last month when it considered the spending bill. The House version of the fiscal 2009 Defense Department Authorization bill goes even further, banning all new public-private competitions conducted under the rules in the Office of Management and Budget's Circular A-76 for three years.

Federal employee unions hailed the Senate committee's move. Unions have lobbied strongly against competitive sourcing, arguing that the initiative is a thinly veiled attempt to outsource federal jobs.

"It takes a major step toward reining in the runaway contracting of federal jobs to the private sector that has been a hallmark of this administration's domestic agenda," said Colleen Kelley, president of the National Treasury Employees Union.

"The smart, cost-effective step to take for taxpayers is to keep the work of the public in the hands of trained, accountable federal employees."

American Federation of Government Employees National President John Gage said the moratorium is needed to prevent OMB from imposing quotas on the number of jobs federal agencies place under competition.

"Not even contractors would dispute the point that OMB political appointees have imposed numerical privatization quotas on all agencies -- large numbers of federal employees who must be reviewed for privatization within certain periods of time -- and that all agencies are graded for compliance with the quotas, and, if necessary, punished, by OMB in the budget process," Gage said.

The 2008 omnibus spending bill included a provision that prevented OMB from directing agencies to conduct any A-76 study. But, Gage said, OMB has not issued any guidance to implement the law. OMB officials said they no longer use quotas and do not direct agencies to conduct competitions.

The White House opposes the one-year moratorium, arguing that competitive sourcing studies completed since fiscal 2003 are expected to produce more than $7 billion in savings.

"A moratorium would inappropriately interfere with agencies' ability to manage resources in the most cost-effective manner," said Robert Shea, associate director for administration and government performance at OMB, last month.

The appropriations measures are the latest in a series of congressional actions to bring to an end to competitive sourcing, one of the Bush administration's signature management policies.

In the past several years, Congress has passed legislation that excluded health care and retirement benefits from the cost comparison process, established protest rights for federal teams on the losing end of the competitions and halted all new competitions at nine key agencies.

The Senate bill also encourages federal agencies to begin insourcing jobs currently performed by contractors. The legislation recommends A-76 competitions as one method to begin converting these now-contract positions into federal jobs.

"The heads of executive agencies ... shall devise and implement guidelines and procedures to ensure that consideration is given to using on a regular basis, federal employees to perform new functions and functions that are performed by contractors and could be performed by federal employees," the bill states.

Lawmakers point out that special consideration should be given to any job that has been performed by a federal employee during the past decade, new jobs that are similar to ones previously performed by federal employees and work that has been awarded to a contractor on a noncompetitive basis or to a contractor that has "performed poorly, as determined by a contracting officer" during the past five years.

The Senate Appropriations bill also mirrors the House legislation by ending the Internal Revenue Service's controversial use of private collection agencies to track down delinquent taxpayers.

The debt collection program has been criticized by unions, Democrats and the national taxpayer advocate. Opponents argue that debt collection is a core government function and the program is inefficient and could invade taxpayers' privacy. Independent watchdogs have also criticized the financial viability of the program.

Previous House and Senate attempts to end the program have failed.