Congress' mixed messages on competition

Buylines | Policies, strategies and trends to watch

One of the most prevalent themes in recent congressional
critiques of federal acquisition involves competition or a
perceived lack thereof. Some in Congress believe the
proportion of federal contracts that are competitively
awarded has dropped precipitously even though competition
levels are at about the same proportion today as they were 10 years
ago.

To some extent, congressional concern is
driven by the sometimes confusing but
nonetheless real differences between
competitive procedures and full-and-open
competition, which are often incorrectly
assumed to be synonymous. Even as
Congress continues to express passion for
enhancing competition as a tool to drive
higher performance and greater efficiency,
it also takes precipitous steps that reduce or
even eliminate competition.

In the fiscal 2008 Defense Authorization
bill, Congress added yet more restrictions on
the use of competitive sourcing at the
Defense Department. This includes a prohibition
on requiring government activities that
win a competitive-sourcing competition to
recompete after an appropriate interval.

There can be little doubt that ongoing competition
is critical to continuous performance
improvement and cost efficiencies. That's
why Congress has long insisted ? and federal
acquisition rules have long required ? that
most government contracts be routinely
recompeted. Unfortunately, Congress decided
government activities that win one competition
need not be subject to similar future
expectations ? even in a time of extraordinary
fiscal and workforce pressures.

Congress also passed last year a provision
establishing a strong preference for DOD to
in-source contracted work with limited or no
analytical underpinning. Congress has made
clear its views on work that is contracted with
limited or no competition, price or other
evaluations. Why should it be any different
with in-sourcing? This is not to say that insourcing
should not be allowed because there
are times when it is clearly appropriate. But
the point of maintaining competition,
whether in-sourcing is considered an option
or not, is to ensure that the decision is in the
best interests of the government.

Despite DOD's April implementation guidance,
which does require some degree of
appropriate evaluation, contracts have been
canceled or cut back with little apparent
analysis. Ironically, in some cases, the government
activities involved are struggling to hire
the government employees needed to perform
the work ? a specific reason offered by
the guidance for not in-sourcing. In at least
one other case, contracted work is being
moved to a nonappropriated fund activity
(NAF) in what appears to be a violation of
existing policies and rules that govern
NAFs. Needless to say, no one considers
the effect of in-sourcing on the affected
members of the contractor workforce who,
as a result of in-sourcing, often simply lose
their jobs. Apparently, concern about jobs
only goes one way.

However, the situation is about to get
worse. The House version of the fiscal
2009 Defense Authorization bill calls for a
three-year ban on competitive sourcing
and imposes daunting new bureaucratic
requirements on the creation of high-performing
organizations at DOD. The HPO
prohibition is particularly astounding
because the whole idea of an HPO is to reengineer
internally and improve performance
and efficiency. However, Congress might prohibit
DOD activities from doing so.

Congress is right to continue pressing
agencies to enhance competition to ensure
that our tax dollars are being spent as wisely
as possible. Unfortunately, Congress also has
tied the hands of federal agencies and limited
their competitive flexibility even though they
face harsh fiscal, mission and workforce challenges.
Indeed, when it comes to competition,
what's good for the goose apparently is not
good for the gander ? or the taxpayer.

Stan Soloway (soloway@pscouncil.org) is president
and chief executive officer at the
Professional Services Council.

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