Buy Lines: Competitive sourcing on the ropes

Stan Soloway

It's been a busy time for competitive sourcing.

In February, the General Accounting Office issued a report showing that agencies are making little meaningful progress in meeting administration goals. In April, GAO rejected protests by several federal employees and unions over A-76 decisions. Competitive sourcing was a prominent feature of the Senate's confirmation hearing in April for David Savafian, President Bush's choice to be the next administrator for Federal Procurement Policy.

And May 12, the House Armed Services Committee passed a "kitchen sink" amendment that includes virtually every anti-competitive sourcing idea of the last decade. If passed into law, it would certainly kill the program at the Defense Department.

For its February report, GAO reviewed seven agencies that together did 85 percent of all competitive sourcing during 2002 and 2003. The report showed that of the more than 4,500 federal positions studied under the streamlined A-76 process during the first three quarters of 2003, more than 99 percent, or all except 37 positions, remained in-house. During that same time, the agencies conducted standard competitions for more than 10,000 positions, of which 81 percent remained in-house.

For those committed to a meaningful process, these one-sided results should be disturbing. Equally disturbing is the paucity of information available to assess how those "in-sourcing" decisions were made. GAO's report had no such information. Despite digging through hundreds of A-76 study decisions, the Professional Services Council has been unable to uncover any meaningful information.

What PSC did find does not engender confidence in the process: Studies that encompassed less than one -- that's right, less than one -- full-time equivalent position. Numerous cases in which no qualified bidders were found, even though the work involved is highly commercial. Dozens of solicitations canceled without explanation.

In an era of significant focus on transparency and competition in government contracting, it is disappointing that no one seems concerned about this massive, sole-source "contracting-in," or about the almost total lack of transparency accompanying it.

In its protest decisions, GAO ruled that, under the Competition in Contracting Act (CICA), unions and individual employees, unlike private contractors, are not bidders as they do not assume any of the legal and financial responsibilities associated with a bid or a binding contract. Because CICA provides the statutory foundation for establishing an entity's standing to protest any procurement, the GAO ruling reaffirms that absent a change to the current law, no unions or employees, federal or private, have protest rights. Accompanying the decision was a letter to Congress from the comptroller general recommending that Congress address the issue.

At his confirmation hearing, Savafian indicated a willingness to review the A-76 process, including the protest issue. In written answers to pre-hearing questions, he said he would consider extending protest rights beyond the agency tender official, who is the legal representative of the government's most efficient organization (MEO) and its workforce. Shortly thereafter, Sen. Susan Collins (R-Maine) announced plans to introduce legislation to extend protest rights to public employees and unions.

These events make for an appropriate time to revisit the unanimous principles agreed to by the Commercial Activities Panel in its 2002 report. Congress mandated the panel, chaired by the comptroller general, to include government, industry and federal employee union leadership, and charged it with recommending a way forward on competitive sourcing. The panel unanimously agreed that competitive sourcing must be driven by agency and mission need rather than by quotas or preconceived notions.

Likewise, the panel unanimously agreed on the need for a fully transparent and accountable process; but as the GAO report and PSC's research indicates, there is a stark lack of information available on these thousands of sole-source, in-sourcing decisions. Unfortunately, outside of industry, which is being asked to expend valuable bid and proposal dollars on these "competitions," there seems to be little attention being paid to this trend.

The Commercial Activities Panel also unanimously recommended that all bidders assume the same responsibilities and, in turn, be granted the same rights. Granting protest rights to the agency tender official, the legal representative of the government "bidder," would create parity in the appeals process, even though government MEOs are not evaluated on all of the same criteria as private-sector offerers. The panel specifically did not endorse extending those rights to public- or private-sector employees or unions.

Sadly, proposals to extend protest rights to federal employees or unions are based solely on the harsh, undocumented presumption that agency tender officials -- career government professionals all -- will ignore their legal and ethical responsibilities to file a protest when one is justified.

As the competitive sourcing debate continues, the panel's unanimous principles provide a touchstone against which to measure proposed policy changes. After all, they reflect consensus among the panel's diverse members representing all key stakeholder communities. Unfortunately, as recent events show, those unanimous principles are being seriously eroded, as is the very credibility of the competitive sourcing initiative itself.

Stan Soloway is president of the Professional Services Council; he previously served as deputy undersecretary of defense and was a member of the Commercial Activities Panel. His e-mail is soloway@pscouncil.org.

About the Author

Stan Soloway is president and chief executive officer of the Professional Services Council.

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