Anti-outsourcing amendment makes it through House

The House of Representatives yesterday passed an amendment to the Treasury-Transportation appropriations bill that would dampen the Bush administration's efforts to conduct public-private competitions for federal work under rules established in May 2003.

The amendment, sponsored by Rep. Chris Van Hollen (D-Md.), would allow agencies to use the rules laid out in the old Office of Management and Budget Circular A-76 to conduct public-private competitions until OMB revises the circular again. The amendment was approved by a 210-187 vote.

The Van Hollen amendment mirrors one added to the Treasury-Transportation bill in the Senate.

Van Hollen said he wants the rules rewritten so they treat federal employees more fairly. Among the numerous changes he wants are:

*Tracking costs and quality of contractor work

*Preventing federal work from being contracted out without conducting public-private competitions

*Allowing federal employees to compete for new work and contractor work

*Allowing federal employees to appeal agencies' contracting-out decisions to the Government Accountability Office and the Court of Federal Claims

*Requiring contractors to promise savings of at least 10 percent over the government's bid in order to offset the government's cost of conducting the competition.

Van Hollen said the May 2003 rules do not require contractors to show that they would save the government at least $10 million or 10 percent of the government's personnel costs, as the old rules required. But in fact, the May 2003 circular requires 10 percent of the government's personnel costs, or $10 million, whichever is less, to be added to the non-incumbent's bid on competitions of more than 65 positions.

The Professional Services Council, an Arlington, Va., industry group, blasted the House effort to kill the May 2003 rules.

"The passage of this amendment is a slap to anyone interested in more efficient, higher performing government," said Stan Soloway, PSC president. "The government already has an unbalanced win ratio of almost 90 percent in A-76 studies. Given that, it is remarkable that anyone could still claim the process is biased toward industry."

John Threlkeld, a spokesman for the American Federation of Government Employees, a Washington union, said that no matter how many competitions are won by government employees, the competition process still favors contractors, because federal employees can't compete for new work, and because federal employees can't compete for work performed by contractors.

Administration officials said last week that they would recommend the president veto the Transportation-Treasury spending bill if the Van Hollen provision is included in the final bill.