Federal Times Blogs
A coalition of businesses pushing for the privatization of government work ranked Congress this week on votes that would have invited more competition between the public and private sector.
“We are seeing an unprecedented level of government expansion into numerous activities that should be left to the private sector,” John Palatiello, president of the Business Coalition for Fair Competition, said at a news conference at the National Press Club on Thursday. “In our free enterprise system, government should be the umpire, not the opposing team.”
The coalition’s report lists how each member of the U.S. House and Senate voted on legislation, amendments and procedural actions — 10 in each house — that would have allowed private companies to compete with government workers or impeded companies’ competition for federal contracts.
Among the Senate actions members were scored on were amendments that would have repealed the previously enacted government-run healthcare law and allowed private companies to compete with the Postal Service. Key House votes included amendments that prevented the executive branch from requiring companies to disclose their political contributions as a condition of winning government contracts and that would have removed restrictions on agencies’ use of OMB Circular A-76 public-private cost competitions.
Not surprisingly, Republican leaders, such as Senate Minority Leader Mitch McConnell and Rep. Paul Ryan, who is presidential candidate Mitt Romney’s running mate, agreed with the coalition’s position on key votes. On the other hand, Democratic leaders, such as Senate Majority Leader Harry Reid and House Minority Leader Nancy Pelosi, received goose eggs.
Federal employees worried that their jobs will be outsourced to the private sector can rest easy for another year. The 2011 budget proposal continues a governmentwide moratorium on public-private competitions for federal work.
But contractors may face further insourcing under the proposal. While blocking agencies from competing federal work, the budget’s “general provisions” section requires agencies to take a head count of all contractor employees performing services for the government. The so-called “service contract inventory” must also include the name of the vendor, the type of service provided and the cost of that service.
Businesses may also see fewer federal contracts on the street in fiscal 2011 as the White House renewed its call for agencies to meet the $40 billion contract savings target by the end of that year. To meet this savings goal, the White House encouraged agencies to buy in bulk.
UPDATE: OMB says the definition of inherently governmental functions is still being worked on. Expect to hear something by the end of the year.
The Office of Management and Budget just released two long-awaited procurement reform memos. The first is about increasing competition while reducing risk in contracting. The second is about strategic planning for the civilian agency acquisition workforce.
So far no word on a A third piece of expected guidance meant to clarify the definition of inherently governmental functions was not released today as expected [see update above]. That memo will help agencies carry out earlier guidance to insource certain contractor-performed work.
A full story on the new guidance will be posted on FederalTimes.com later today.
We told you earlier today about a Republican bill introduced yesterday to promote the outsourcing of commercial work performed by federal employees.
Now enter the American Federation of Government Employees, a privatization foe,Â announcing it has taken “its contracting out reform campaign to the House of Representatives.”
In aÂ June 4 news release, union boss John Gage applauded the introduction of Mikulski’s CLEAN UP Act in the HouseÂ by Rep. John Sarbanes, D-Md.Â
The CLEAN UP Act is vital to any serious effort to save taxpayer dollars and restore integrity to the federal procurement process…The bill calls on the Obama administration to correct problems in the Office of Management and Budget’s privatization process that have been identified by the Government Accountability Office, the Department of Defense Inspector General, House Armed Services Committee Chairman Ike Skelton (D-MO), and others, before again using the A-76 circular.
In April, several senate Democrats, led by Maryland’s Barbara Mikulski, introduced a bill to convert some contracted work to federal performance and otherwise prevent the government from competing federal jobs with the private sector.
Mikulski’s “CLEAN UP Act” – short for “Correction of Longstanding Errors in Agencies Unsustainable Procurements Act” – drew applause from unions andÂ criticism from industry groups. But now Senate Republicans are getting in on the act with their own bill designed to do the opposite.
Sen. John Thune, R-S.D., introduced the “Freedom From Government Competition Act” yesterday. The billÂ mandates federal agencies rely on the private sector for commercially available goods and services.
The bill would codify what Thune calls the “yellow pages test,” meaning if government employeesÂ perform tasks found in the phonebook, then agencies should compete those jobs with the private sector.
Thune said in a statement:
This bill would ensure the government isn’t involving itself in areas that duplicate products and services that are available in the private sector and in doing so protecting taxpayer interests. This legislation would give private companies the chance to do the work which has been shown to save taxpayer money.
However, Thune’s news releaseÂ also claims the bill will “not mandate the privatization of any federal service and would protect those activities which are inherently governmental, such as certain national defense and homeland security functions, prosecutions, foreign policy and activities to bind the United States to take or not to take some action by contract, policy, regulation, authorization, or order.”
Thune’s co-sponsors on the legislation are Senators James Inhofe, R-Okla., Pat Roberts, R-Kan., Sam Brownback, R-Kan. and David Vitter, R-La.
Industry is “deeply concerned” about a bill meant to bring work performed by contractors in house, Professional Services Council President Stan Soloway said in a May 5 letterÂ to bill sponsor Sen. Barbara Mikulski, D-Md.
Mikulski introduced the Correction of Longstanding Errors in Agencies Unsustainable Procurements (CLEAN UP) Act last week. The bill would ban the use of public-private competitions until agencies ensure inherently governmental work and work closely associated with inherently governmental functions is performed by federal employees. Agencies would also have to inventory contracts and give feds the opportunity to compete for outsourced work, even if the work can be done by contractors.
Mikukski said last week that this bill would correct “the contracting abuses of the last eight years and bringing jobs that were wrongly awarded to private contractors back to where they belong – with our first-rate federal employees.”
But Soloway counters the legislation works at cross purposes with Mikulski’s goals of supporting the federal worker:
The ban on competitive sourcing studies across government has eliminated the only process that gives employees the opportunity to compete the commercial activities work. Absent the A-76 process, what competitive process should be implemented to ensure that any decision to insource work will result in meaningful cost and performance improvements?
Soloway also noted that work “closely associated with inherently governmental” jobs is not defined and there is “no logical reason” that such jobs must be done by feds.
The key is for agencies to carefully and strategically assess their missions and work to ensure that they have adequate internal capability in critical positions to provide the guidance, expertise and management necessary to achieve cost, schedule and performance goals. Your legislation would strip agencies of their ability to act strategically by replacing it with arbitrary workforce planning that may not be consistent with the agency’s or the taxpayers best interests.
Soloway has asked Mikulski to discuss PSC’s concerns surrounding the bill, noting that several federal contractors have offices and employees in Maryland.
Update, May 8, 1:20 p.m.: Sen. MilkulskiÂ has sent us this statement:
I appreciate that the PSC agrees that the contracting process should be Â fair and use taxpayer’s money efficiently. However, what’s not taken into account is the already substantial success of efforts to identify wrongly outsourced jobs and bring them back to performance by Federal Employees. The Army has announced savings of $300 million through the in-sourcing of 1,400 contractor jobs. Secretary of Defense Gates plans to expand this program to bring 30,000 jobs back to performance by federal employees over the next five years. Secretary Gates is committed to this effort for the same reason I am — it saves money for the taxpayers and allows the Department he leads to better fulfill its critical mission. My legislation builds on Secretary Gates’ success and Â takes it government wide.
Sen. Barbara Mikulski, D-Md., is expected to introduce a bill tomorrow that will suspend government’s use of public-private competitions for federal work.
If Mikulski’s Correction of Longstanding Errors in Agencies Unsustainable Procurements (CLEAN UP) Act becomes law, agencies will be barred from using competition rules set under Office of Management and Budget Circular A-76 until they implement the following provisions:
- Amend the A-76 process to include the full cost of conducting a competition, to charge in-house bidders only for actual overhead costs, to abolish automatic re-competition of work won by federal employees, and to impose a firm time limit on studies.
- Ensure that work considered inherently governmental functions and functions closely related to inherently governmental work is only performed by federal employees. Where such work is outsourced, agencies must develop plans to bring the work back in house.
- Encourage agencies to give feds the opportunity to compete for new work, work outsourced without competition or outsourced work that is poorly performed, even if the work was properly outsourced.
- Require that agencies inventory contracts to find contracts for inherently governmental work, contracts awarded without competition, and contracts that are being poorly performed.
- Require agencies to develop plans for handling predicted staffing shortages in federal career fields.
The proposed, temporary suspension of A-76 competitions– frequently referred to as outsourcing, privatization or competitive sourcing– would be lifted once the OMB director and the inspectors general of the five largest departments determine these provisions have been “substantially implemented.”
In a statement, Mikulski said:
The Bush Administration made a mess of federal personnel contracting – pushing contracting out even when it wasted taxpayer dollars and undermined the mission of our federal agencies. … This bill will be a major step towards cleaning up the contracting abuses of the last eight years and bringing jobs that were wrongly awarded to private contractors back to where they belong – with our first-rate federal employees.
The bill will be co-sponsored by Senators Sherrod Brown, D-Ohio; Roland Burris, D-Ill.; Robert Casey, D-Pa.; Dick Durbin, D-Ill.; Kirsten Gillibrand, D-N.Y.; Edward Kennedy D-Mass.; Patrick Leahy, D-Vt.; Patty Murray, D-Wash.; and Charles Schumer, D-N.Y.
More lawmakers are calling on the Defense Department and the Office of Management and Budget to stop public-private competitions for federal work, which are conducted under OMB Circular A-76.
House Armed Services Committee chairman Ike Skelton, D-Mo. and Readiness Subcommittee chairman Solomon Ortiz, D-Texas, sent a pair of letters to OMB Director Peter Orszag and Defense Secretary Robert Gates on March 26. The letters urge them to stop using the circular and to conduct a review of competitive sourcing to ensure it’s the right thing for the government.Â
The two House Democrats believe that competitive sourcing has become “a mandate in recent years for pushing more and more work into the private sector, even work that is closely associated with inherently governmental functions, in order to meet arbitrary competition goals.”
The lawmakers wrote:
Many of the Department’s A-76 studies have dragged on far beyond the time limits authorized in the 2003 revised Circular A-76, as well as those imposed by statute.Â This creates an unfair strain on the federal employees whose jobs are being competed, as well as the contractors who have submitted bids for the work.
They noted that manyÂ military service leaders have asked DoD to cancel competitions under their command becauseÂ the installation has an alternative approach or because the study was inappropriate, “only to be denied by the Department.”Â
Skelton and Ortiz also cite the fact that President Barack Obama declared on March 4 that his administration “will stop outsourcing services that should be performed by the government.”
The call comes two days after the U.S. Military Academy announced that more than 300 public works jobs there would go to the private sector. The lawmakers representing those workers sent letters to Gates on March 18 asking him to cancel the competition before a decision was made.
The United States Military Academy will outsource more than 300 public works jobs to the private sector, the university announced today.
Ginn Group, a Peachtree City, Ga. company, was selected to provide public works and maintenance services to the Army’s West Point, N.Y. campus.
The decision is tentative and will be subject to a 20-day review period during which losing bidders can protest to the Government Accountability Office. The estimated cost savings will be released following that 20-day period, a USMA spokesman said.
Congress and the White House have declared their desire to see an end to public-private competitions for federal jobs through the omnibus bill and other proclamations. But that doesn’t mean the competitions have been stopped completely.
Approximately 570 public works and custodial employees at the U.S. Military Academy will learn the fate of their jobs next week when a two-year long public-private competition for their jobs is expected to conclude.
Two members of congress are urging the Defense Department to cancel the competition before a decision is announced. In a March 18 letterÂ to Defense Secretary Robert Gates, Reps. John Hall, D-N.Y., and Maurice Hinchey, D-N.Y., wrote:
The A-76 program was shut down by Congress in the omnibus appropriations act that the president signed into law earlier this month because of longstanding concerns. Two Government Accountability Office reports issued last year detail how poor guidance from the Office of Management and Budget had result in systematically overstated savings and understated costs.
In the letter, the congressmen write that the West Point competition is unlikely to save the government money because it has overrun its 30-month statutory time limit. The competition was formally announced in 2006, but has been in planning stages since 2002.
They also cited a 2008 appeal from West Point leaders to Army commanders to stop the competition because internal reengineering of the work would be “less disruptive” and yield greater savings than the prolonged competition with the private sector. That appeal was rejected.
Don Hale, the president of the local American Federation of Government Employees chapter representing the employees, said he hopes Congress can stop the competition and preserve federal jobs in the economically depressed region.
Employees are still willing to implement their proposal to make the academy run more efficiently, said Hale, who could lose his job if the federal employees do not win.